May 14, 2024
Net sales increased 10.1% year-on-year (Y-o-Y) for Q4 FY24, the highest in the past four quarters
Gains in revenue and profit were predominantly driven by the BFSI sector and automakers, highlighting a sectoral imbalance
BFSI companies added nearly INR 20,100 crore to their net profit in Q4 FY24 Y-o-Y, accounting for two-thirds of the overall profit growth
Tata Motors significantly contributed to earnings growth, with its net profit jumping to INR 17,483 crore in Q4 FY24 from INR 5,574 crore a year earlier
India Inc. saw an increase in revenue growth for the January-March quarter (Q4) of 2023-24 (FY24), accompanied by a slowdown in earnings growth. The data reveals a significant sectoral imbalance in revenue and profit growth for the quarter. Most gains in net sales and net profit were driven by companies in the banking, financial services, and insurance (BFSI) sectors and automakers.
The combined net sales (or gross interest income for banks and other lenders) of 631 listed companies in the Business Standard sample rose by 10.1% year-on-year (Y-o-Y) in Q4FY24, up from 9.4% growth in Q3, marking the highest increase in the past four quarters. However, their combined net profit (adjusted for exceptional gains and losses) grew by 13.4% Y-o-Y in the fourth quarter, down from 24.2% Y-o-Y growth in Q3 and the slowest pace in the past six quarters.
The combined net profit of all 631 companies grew to approximately INR 2.6 trillion in Q4FY24, from INR 2.29 trillion in Q3FY24 and INR 2.29 trillion in Q4FY23. For 496 companies excluding BFSI, net profit increased to about INR 1.5 trillion in Q4FY24 from around INR 1.32 trillion in Q3FY24 and INR 1.4 trillion in Q4FY23. Excluding both BFSI and oil & gas sectors, the net profit of 484 companies rose to around INR 1.16 trillion in Q4FY24, from INR 1 trillion in Q3FY24 and INR 0.96 trillion in Q4FY23.
There was also a significant variation in revenue growth across sectors. The net sales of companies excluding BFSI increased by 6.3% Y-o-Y in Q4FY24, up from 4.9% Y-o-Y growth in Q3FY24 but down from 12.3% growth in Q4FY23. For companies excluding both BFSI and oil & gas, net sales grew by 8.4% Y-o-Y in Q4FY24, down from 8.9% Y-o-Y growth in Q3FY24, indicating a slowdown in demand in the core manufacturing and services sectors.
The overall revenue and net profit gains were largely driven by the BFSI and automobile sectors. BFSI companies contributed nearly INR 20,100 crore to their combined net profit in Q4FY24 on a Y-o-Y basis, accounting for two-thirds of the total net profit growth in the quarter. The total net profit of all listed companies in the sample increased by INR 30,600 crore Y-o-Y in Q4FY24. BFSI companies also accounted for 54% of the overall net sales growth (gross interest income for banks and non-bank lenders) in Q4FY24 Y-o-Y.
The corporate earnings report for Q4FY24 has been on track so far, with 70% of our coverage universe either meeting or surpassing profit expectations. However, according to experts, growth has mainly been driven by the BFSI and automotive sectors.
Among individual companies, Tata Motors was the top contributor to earnings growth, accounting for 39% of the total incremental growth in overall corporate profit in Q4FY24 Y-o-Y. The automaker’s adjusted net profit surged to INR 17,483 crore in Q4FY24 from INR 5,574 crore a year earlier. It was followed by the State Bank of India (13.1% contribution to incremental earnings growth), Axis Bank (8.1%), and Punjab National Bank (6%).
Source: Business Standard