Blue chips keep tight leash on spend in Q1

No major cut in employee expenses

Most Sensex companies' first quarter employee benefit expenses saw minor deviation compared to fourth quarter of FY19-20, indicating far less salary cut and job losses than what is being talked about in the wider universe. But their other operational expenses, like advertising and promotion, travel, freight & forwarding, were down sharply, helping them post healthy profit and beat muted expectations.

A Financial Chronicle analysis of April-June 2020 consolidated results of top Sensex companies representing various sectors show employee benefit expenses were down sharply for Hindustan Unilever (Rs 1,434 crore), Infosys (Rs 688 crore), Reliance Industries (Rs 545 crore), SBI (Rs 276.95 crore), Tata Steel (Rs 189.44).

But for HDFC Bank, ICICI Bank, Hero MotoCorp, Mahindra and Mahindra, Maruti Suzuki, Ultratech Cement, Titan Company, Nestle, Asian Paints and Bajaj Finance employee benefit expenses were down by less than Rs 100 crore. The same was a tad higher for Tata Consultancy Services (Rs 42 crore), HDFC (Rs 6.48 crore), ITC (Rs 25.88 crore) while Bharti Airtel’s employee expenses were higher by Rs 125 crore and Sun Pharma’s by Rs 107.15 crore.

Bharti Airtel announced a one-time bonus for all its employees as a token of appreciation for helping the company navigate in these turbulent times.

Other operational expenses were down significantly for State Bank of India (by Rs 6,816.17 crore), ICICI Bank (Rs 6,179.24 crore), Tata Steel (Rs 3,800.98 crore), Maruti Suzuki (Rs 1,750.5 crore), ITC (Rs 1,378.4 crore) and

Sun Pharma (Rs 630.9 crore).

For Hero MotoCorp other expenses were down by Rs 483.35 crore.

For Hindustan Unilever advertising and promotion expenses were down by Rs 3,538 crore, for Bharti Airtel by Rs 205.4 crore, for Titan Company by Rs 76 crore.

For software major Infosys travel expenses were down by Rs 551 crore to just Rs 116 crore compared to Rs 667 crore during the previous quarter.

For bulk goods mover Ultratech Cement freight and forwarding expenses were lower by Rs 1,072.72 crore at Rs 1,605.85 crore compared to Rs 2,678.57 crore in the previous quarter.