The December quarter (Q3FY23) earnings suggest economic activities in non-financial services, including manufacturing, slowed down sharply, reported Business Standard.
"On costs, companies got some respite from rising prices of commodities and energy but these gains were offset largely by faster growth in interest expenses. A combination of a slowdown in revenue growth and a faster rise in expenses adversely affected the earnings of non-BFSI (banking, financial services, and insurance) companies," explained the report.
In contrast, the report highlighted that a rise in the interest burden for India Inc translated into an earnings bonanza for lenders, especially banks. The third quarter was the best for banks in at least four quarters and they accounted for most of the incremental growth in corporate earnings in the period, it added.
According to BS, the net sales growth for listed companies excluding banks, finance, insurance, and stockbroking declined to an eight-quarter low of 17.1 percent year-on-year (YoY) in Q3FY23, down sharply from 29.2 percent in Q2FY23 and 28.4 percent in the third quarter of FY22.
The combined net profits of 2,790 listed companies (ex-BFSI) were down 14.2 percent YoY to around ₹1.49 lakh crore in Q3FY23 from ₹1.74 lakh crore a year ago, mentioned the report. In comparison, these companies' combined net profits were down 23.8 percent YoY in Q2FY23 to ₹1.39 lakh crore, it added.
Meanwhile, banks’ combined net profits were up 42.7 percent YoY to a record high of ₹67,943 crore in Q3FY23 from ₹47,603 crore a year ago and ₹61,037 crore in Q2FY23, noted the report.
In the same vein, NBFCs’ combined net profits reached a new high of ₹26,653 crore in Q3FY23, up 35.4 percent YoY against ₹19,687.4 crore a year ago and ₹22,844 crore in Q2FY23, it added.
However, the combined net profits of all 3,344 listed companies in the Business Standard sample were up 1.1 percent in Q3FY23 to ₹2.44 trillion against ₹2.41 trillion a year ago and ₹2.23 trillion in Q2FY23. The listed companies' combined net profits in the third quarter were, however, 9.5 percent lower than the record high of ₹2.7 trillion in Q4FY22.
However, going ahead, analysts expect a further slowdown in corporate growth in the fourth quarter, the report added.