The January-March quarter earning season continues to maintain the good start it made with a sample of 279 companies (excluding Cairn India, Vedanta, banks and financials) reporting a net sales growth of 3.64% on a year-on-year basis. With expenditure remaining flat, operating profit margins rose 236.96 basis points y-o-y driving up the operating profit by a decent 16.46% y-o-y and net profits by a strong 25.02% y-o-y.
On the back of a 9.25% growth in volumes and a strong margin performance during the quarter, two-wheeler market leader Hero MotoCorp met street estimates by posting a net profit growth of 71% on a year-on-year basis at Rs 814.16 crore. The firm’s Ebitda at Rs 1,175.81 crore was up by 40.24% and Ebitda margin of 15.65% was 331 basis points higher compared to its performance in the same period last year. The volume growth came from the growth in scooters sales and a slight pickup in the urban markets. Raw material costs to sales declined to 66% as raw materials showed a benign trend during the quarter once again.
The largest private sector power developer, Adani Power also posted a consolidated profit of Rs 1,173 crore, an increase of 64% compared to the corresponding period last year, on account of higher sale of electricity. The company sold 41% more power at 17.1 billion units in the January-March period.
For Godrej Consumer, growth in the domestic business was driven largely by volumes, with the firm reporting strong 9% volume growth during the period. From the high base of last year, gross margins expanded 154 basis points leading to Ebitda margin expansion of 132 basis points this quarter.