India Inc faces economic headwinds: profit growth slowest in 14 qrts

In a challenging economic landscape, India Inc has reported its Q3FY24 results, revealing a concerning trend of the slowest profit growth in the last 14 quarters.Sample of early-bird companies shows worst net sales since Q3FY21.The early-bird results for the October- December 2023 quarter (Q3FY24) hint at a slowdown in corporate profit growth and a further deceleration in India Inc’s revenue growth.The combined net profit of 215 early-bird companies that have declared their quarterly results so far is up 12.5 per cent year-on- year (Y-o-Y) in Q3FY24, growing at the slowest pace in the last 14 quarters.
These companies' net sales (gross interest income for banks and non-banking finance companies) were up 9.4 percent Y-o-Y in the third quarter, their worst show since the December 2020 quarter when net sales P2 were down 3.5 percent Yo-Y. The numbers are adjusted for the merger of HDFC Bank and HDFC in July 2023, according to information.Reportedly,the early-bird companies, excluding banks, finance, insurance, and stockbroking (non-BFSI), performed even more poorly, and their combined net profit was up 7.8 percent Y-o-Y in Q3FY24, while their net sales were up just 4.5 percent Y-o-Y during the quarter. This is the slowest revenue growth for non-BFSI companies since Q1FY23.
The quarterly financial performance indicates that businesses across various sectors are grappling with headwinds, impacting their ability to achieve robust earnings.The coming quarters will likely require strategic resilience, innovation, and adaptability as businesses strive to navigate uncertainties and return to a trajectory of sustained growth.

(Ira Singh, Asstt Editor, Gandhinagar)