Taking pole position: Auto, BFSI dominated Q4 corporate earnings circuit

Operating margins put the pedal to the metal on corporate earnings, fuelled by sector-wide Ebitda margin gains, driving net profits to victory in five straight quarters

Operating margins have been the primary driver of corporate earnings in India in recent quarters, despite revenue growth suffering from weak consumer demand.

Companies across sectors have reported a sharp improvement in earnings before interest, tax, depreciation, and amortisation (Ebitda) margins over the past two years, benefiting from lower commodity and energy prices.

Higher margins more than compensated for slower revenue growth, resulting in double-digit growth in net profit for five consecutive quarters.

Adjusted for exceptional gains and losses, the combined net profit of listed companies rose by 11.4 per cent year-on-year (Y-o-Y) in the fourth quarter (Q4) of 2023-24