Firms post best quarterly profits

■ THE COMBINED net profits of 1,400 listed companies grew 10.6%, the fastest growth in the last 13 quarters. ■ THOUGH THE numbers came on the back of very low base, markets are apprehensive about companies maintaining current pace of growth.

After remaining subdued for the past several quarters, India Inc’s earnings growth for the quarter ended December 2017 seems encouraging with both the combined sales and net profits growing in double-digit numbers.

Around 1,400 companies have declared their latest numbers till date. Their combined net profits grew 10.6 per cent while their net sales went up 14.6 per cent over the same period of the previous fiscal, their fastest growth in last 13 quarters. While the impressive growth numbers came on the back of very low base, markets are little apprehensive whether corporate India would be able to maintain their current pace in earnings growth.

“After beginning on a strong note, the Q3FY18 earnings season lost sheen toward the end, led by disappointment from heavy-weights like SBI, Tata Motors, Lupin and ONGC. However, what’s more encouraging is that the earnings picture is getting brighter, with the recovery expected to gather pace in FY19,” said Motilal Oswal Securities.

According to it, the key trends witnessed during the quarter is the recovery in consumption-oriented sectors. While private banks showed sequential improvement in asset quality, PSU banks posted a mixed performance on the asset quality front.

“Bull markets generally make a top when the numbers are great and bear market forms a bottom when the numbers are ugly. Indeed the market seems to have discounted the fact that good numbers are due to low base effect but going ahe-ad whether such growth numbers would be delivered. Markets currently don’t thinks so and hence the price correction seems deepening,” said Jimeet Modi, founder and CEO, SAMCO Securities.