At the end of the day, it was Tata Motors that saved India Inc a few blushes. Driving in with a net profit of Rs 1,988.7 crore for the June 2010 quarter, the auto firm surprised the Street with a great show thanks to Jaguar and Land Rover. The company won itself a rating upgrade from Standard and Poor?s (S&P). It was somewhat the reverse at Tata Steel with operations at the Anglo-Dutch subsidiary, Corus, suffering even after making concessions for currency impact. The profitability of the steelmaker in India was, however, robust with Ebitda per tonne at $444. In the banking space, State Bank of India (SBI) turned in a stellar set of numbers for the June quarter, posting a net interest margin of 3.18%, possibly the highest in more than two years.

Otherwise, it?s been a fairly forgettable results season. Bharti Airtel?s numbers just about met expectations on the top line, but the telco?s net profit fell by nearly 49% thanks to forex fluctuations. Reliance Communications wasn?t great either; revenues were virtually flat when looked at sequentially while Ebidta moved up by just under 2% when compared with the March 2010 quarter. The bottom line plunged thanks to notional provisioning for forex movements.

For a sample of 2,103 firms (excluding banks and oil companies), net sales rose by 22% y-o-y. However, the operating profit margin (opm) declined by a sharp 300 basis points to 17.8% and was better than the margin posted in the March 2010 quarter. However, the net profit for the sample surged just 7.5% year-on-year, way below the 40% growth achieved in the March 2010 quarter. One reason for this was that other income, this time around 17%, fell compared with an increase of 20% in the March quarter.

With the majority of companies putting out results that were below estimates, analysts had already revised the earnings estimates for 2010-11 by 2-3%, even before all the numbers were out. It?s possible that they could revisit their numbers once again now that there have been more misses over the last week. Indeed read together with the industrial growth numbers, it would appear that growth is clearly slowing down and, therefore, earnings growth could moderate. The factory output growth numbers for June 2010, announced last week, stood at 7.1% y-o-y, compared with consensus estimates of over 8% and the 11.3% achieved in May 2010, were a tad disappointing. However, the problem may lie on the supply side rather than demand. As HSBC points out, the lower-than-expected numbers highlight the capacity constraints. ?We believe that industry demand is stronger than the rate at which factories can produce what is demanded and that is limiting growth,? it said in a report.

Another view, from brokerage IIFL, was that the misses in the domestic cyclical sectors such as auto and capital goods reflected competitive or supply-side issues rather than a slackening of demand.