India Inc’s financial performance so far reflects the disruption created on account of companies adhering to the goods and services tax, which got effective July 1.
Net sales of 132 companies, excluding financial services, metals and oil and gas companies, have grown in lower single-digit of 4.6 per cent year-on-year in June quarter, while adjusted net profit has fallen 1 per cent y-o-y.
This is much lower than the performance of India Inc in the previous quarter. A sample of 204 companies, excluding financial services, metals and oil and gas companies, shows that net sales and net profit grew about 10 per cent and 5 per cent y-o-y, respectively.
Number of companies are different but both samples exclude financial services, metals and oil and gas companies. Hence they show a similar trend.
Madan Sabnavis, chief economist, CARE Ratings, pointed that de-stocking prior to GST implementation impacted growth in sales, while the discounts offered in some segments affected profits in some segments.
This is evident in the financial performance of total 185 companies, including financial services, oil and gas and metals companies. Sales and profit have grown 9.8 per cent and 5.3 per cent, respectively.
Sectors like cement, entertainment, infrastructure, metals, retail, sugar and oil and gas have performed well at least on the topline front.
Most mid cap companies have performed better than the large caps. Among the mid cap companies, good performance has been reported by UPL, InterGlobe Aviation, Escorts, ABB, GE T&D India, Navine Flourine International, Bharat Electronics, PC Jeweller, DCM Shriram, Inox Leisure, Container Corporation of India, HT Media, Info Edge (India), Glenmark Pharmaceuticals, Piramal Enterprises, Torrent Power, Indiabulls Real Estate and Trent.
Top five large performing companies, excluding financial services, metals and oil and gas, are Reliance Industries, Maruti Suzuki, Larsen and Toubro, Power Grid Corporation of India and Ambuja Cements.