Companies look to protect profitability as topline comes under strain
ET Intelligence Group: A majority of sectors have so far reported either a decline in or lower growth year-onye a r i n s a l e s a nd p r o f i t i n t he December 2016 quarter compared with the previous quarter. The pain is, however, not fully reflected in the aggregate numbers due to a relatively better show by the information technology (IT) sector. It contributed one-third to the total revenue and nearly half to the total net profit of a sample of 597 companies that have so far de- clared results for the quarter. The sample’s net sales increased 4.3% year-on-year, marginally lower than the 5.1% growth in the previous quarter. It was also the slowest growth in five quarters. Net profit rose by 19.6% compared with 18.3% in the September 2016 quarter. The sample excludes companies from banking and finance, and oil and gas sectors. The operating margin at 17.7% was similar to that in the previous quarter, reflecting the efforts taken by companies to protect profitability at a time when sales growth is muted. Sect o r s s uch a s c o nstruction, FMCG, hospitality, media and entertainment, real estate, and textiles, reported a ye a r - o n - ye a r d r o p i n r e ve n u e. Sectors that reported lower growth in revenue were auto and ancillaries, chemicals, and consumer durables.