India Inc achieved its quickest revenue rise in 15 quarters during June, yet margins suffered as input costs surged, highlighting tensions between growth and profitability amid a complex economic landscape.
India Inc posted its fastest revenue growth in 15 quarters in the June quarter, but the surge came with a cost: margins were squeezed by higher input expenses as commodity and energy prices climbed. Business Standard’s analysis of 3,458 companies showed combined adjusted net profit rising 16% year on year to about ₹4.58 trillion in Q1FY27, while net sales increased 18.4% to roughly ₹47.27 trillion.
The pace of expansion was stronger than in the previous year, when profits rose 8.9%, and slightly below the 16% profit growth seen in the March quarter. Yet the quarter-on-quarter picture was softer, with profit slipping 4.4% from around ₹4.79 trillion in Q4FY26, even as sales edged higher. Crisil had already signalled that revenue growth could reach 11% to 11.5% in the quarter, calling it the quickest pace in two years, helped by pricing power that allowed companies to offset some of the pressure from the West Asia conflict.
For non-financial companies, the strain on profitability was more visible. Operating margin fell to 16.9% of total income, down nearly 200 basis points from a year earlier and the lowest in 13 quarters, according to Business Standard’s calculations. Net profit margin also narrowed to 7.4% from 7.9%. Raw material, power and fuel costs climbed 29.5%, outpacing sales growth and marking the fastest increase in 15 quarters.
The earnings mix remained heavily tilted towards finance and commodities. Banks, non-bank lenders and metal producers contributed 66% of the overall year-on-year growth in corporate profits, far above their share a year earlier. Combined profit across those three groups rose 26.6% to ₹1.99 trillion. Mining and metal companies led the pack, followed by finance firms and banks, while oil and gas companies were among the weakest performers as profit fell 22.6% even though revenues jumped on higher prices.
Among individual names, Hindalco was the biggest single contributor to earnings growth, with adjusted net profit surging 116.7% to ₹8,677 crore, helped by higher aluminium prices after supply disruptions. Punjab National Bank, Life Insurance Corporation of India, Bharti Airtel and JSW Steel also delivered large gains, and together the five companies lifted combined profit by 63.9% to ₹40,590 crore. Business Standard said these firms accounted for about a quarter of the quarter’s overall increase in corporate earnings.
Brokerage Motilal Oswal Financial Services said the Q1FY27 results were broadly better than expected, with the pace of earnings downgrades easing and the beat-miss ratio staying constructive. It said nearly half the companies in its coverage universe beat estimates, while the upgrade-to-downgrade ratio reached 1.5 times, the strongest in at least 21 quarters.
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