The post-Covid boom in corporate earnings, as expected, seems to have ended, at least for now, as companies saw margins and profits shrink in the July-September quarter (Q2) of FY23, or 2022-23, a report by Business Standard stated.
Notably, this is the first decline in India Inc’s quarterly earnings since the April-June 2020 quarter, which was impacted due to the outbreak of Covid-19, pointed out the report.
As per the BS report, the combined net profit of 2,725 listed companies across all sectors was down 6.3 percent year-on-year (YoY) in Q2 — the first contraction after eight consecutive quarters of YoY growth.
The companies in this sample reported a combined net profit of ₹2.06 trillion, down from ₹2.20 trillion a year ago and ₹2.08 trillion in the previous quarter, noted the report.
Meanwhile, the combined net sales of all listed companies in this sample were up 25.9 percent YoY in Q2 to ₹29.3 trillion, it added.
However, the corporate earnings would have been even worse if not for the big jump in those of the banks in the second quarter, revealed the report.
The combined net profit of 31 listed banks in this sample was up 54.8 percent YoY to a record high of ₹60,600 crore in Q2, up from ₹39,150 crore a year ago and around ₹45,600 crore in Q1FY23, it informed.
Banks benefited from higher interest rates on loans to customers and faster growth in credit. Their gross interest income was up 18.5 percent YoY in Q2, the best in at least the past four years, stated BS.
