Earnings under pressure

High interest outgo and weak demand are worrying

The downward  trend in revenue growth and contraction in net profit for corporate India in the first quarter of 2019-20 is not entirely surprising. Although weak demand was expected during the general election as buyers postpone certain purchases, the slump seems to have been more pronounced. Combined net sales for 736 companies that have declared results so far have grown by just 8 per cent, year-on-year (YoY), which is the lowest in about three years. If financials and energy sectors are excluded, revenue growth at 5.8 per cent, is the slowest in last nine quarters. From a longer-term perspective, the