It’s been a mixed bag from India Inc so far this earnings season, reports fe Bureau in Mumbai. While Reliance Industries, Maruti Suzuki and Hero MotoCorp put up a good show, Hindustan Unilver and Idea Cellular disappointed the Street and JSW Steel, TVS Motors, ITC and Bharti Airtel turned in middling performances.
The headline numbers are very disappointing: At 5.65% year-on-year, the increase in net sales for a sample of 278 companies is subdued, to say the least, suggesting pressure on both volume and price. With expenditure being reined in, operating profit margins have risen by about 70 basis points but without support from other income, net profits have fallen 1.5%.
The benefits of soft input prices are wearing off — the ratio of raw material costs to sales fell just 40 basis points in Q2FY17 compared with falls of 460 bps, 400 bps and 764 bps in the previous three quarters.
Hindustan Unilever reported a weak 1% growth in net operating revenues, missing expectations. At Dabur too, both volumes and value were weak, the domestic FMCG business growing just 2.4% year-on-year. JSW Steel reported average numbers with good volumes but a sequential drop in Ebitda /tonne following a fall in steel prices. At ABB, while revenues were weak, order inflows were strong, rising 30% on year.