Recovery continues

Operating margin comes under pressure for India Inc

The Q2 results of 738 listed companies indicate economic recovery is continuing. But base effects are easing and profit growth is moderating. The base quarter (July-September 2020) saw activity boosted to an extent by pent–up demand, while April-June 2021 was hit by the second wave. The results are being compared sequentially (QoQ) and annually (YoY) to adjust for the effects. The turnover is up YoY and QoQ. So are profits, at net and operating levels. But profitability growth rates have fallen, and operating profit margins (OPM) have declined. Interest costs are declining, but other expenses have risen. Inflation is impacting