Early birds sing...

Analysts say that this is part of a cyclical improvement in growth and corporate companies in the sample, including earnings, aided by fiscal stimulus RIL, was up 15 per cent YoY during Q2 and an improvement in global - a three-quarter low, but a big growth conditions. “A mild cyclical improvement from 0.1 per cent YoY improvement is expected in economic decline during the corresponding growth and earnings, as the government quarter last year. has stepped up spending this The headline numbers, however, year and global demand conditions largely reflect the performance of private are more benign than a year ago. But sector banks, oil and gas companies, there are question marks over the sustainability and software exporters, as these of the current performance three sectors together account for and it may dissipate over the next few three-quarters of the early birds’ combined quarters,” says Dhananjay Sinha, head net profit of around ~62,700 of research, Emkay Global Financial crore during the quarter. Excluding Services. banks, financials, oil and gas firms,

On the revenue side, early birds the combined net profit was up 5.6 per show that large companies continue cent YoY during quarter, a slight to gain from reflation in commodity improvement from 4.6 per cent YoY and energy prices and restocking post growth during Q1, but down sharply the roll-out of the goods and services from 11.3 per cent growth during Q2 tax (GST) in July this year. While the last year. The trend in their revenues former has translated into higher unit was a little more encouraging, with prices and revenues across the manufacturing combined net sales up 8.5 per cent - value chain, restocking the highest in the last six quarters. helped consumer goods makers such This is largely due to sequential as Hindustan Unilever, ITC, Asian improvement in the top and bottom Paints, Maruti Suzuki, Bajaj Auto, line growth of information technology Whirlpool India, and TTK Prestige (IT) firms such as Tata Consultancy report better-than-expected volume Services, Infosys, Wipro, and HCL and revenue growth during Q2. The Technologies. IT exporters’ rupee revenues gains were, however, uneven, with and margins received a mild some electrical goods makers posting boost from the rupee depreciation tepid volume growth due to GST-related against the dollar during the quarter. issues. Consumer goods makers However, the sector as a whole also gained from an early Diwali this remains a laggard, with low singledigit year. Last year, a large part of the pregrowth in net sales (up 3.1 per Diwali boost in volumes and revenues cent YoY) and net profit (up 2.5 per accrued in the corporate results for cent). Domestic market-focused manufacturers the third quarter (Q3) of FY17; this year, and service providers the bulk of pre-Diwali demand boost reported double-digit growth in net accrued during Q2 itself. profit and net sales boosted by post

The combined net sales of the GST restocking and an early Diwali entire sample were up 12.4 per cent – this year. a three-quarter low, but up from 5.5 per cent growth during the corresponding quarter in FY17. The combined net sales of three oil and gas