India Inc net profit rising in double digits in Q4 despite RIL's dip

ET Intelligence Group: Early results trend for the March 2026 quarter shows that aggregate net profit grew in double digits helped by a low year-ago base and strong performance from banking and finance companies, which also offset the subdued numbers of Reliance Industries (RIL).

For a sample of 159 companies, net profit rose 13% year-on-year compared with a 2.6% growth in the year-ago quarter. The profit growth was in single digit in the previous two quarters. Revenue grew 9%, the highest in seven quarters.

Excluding RIL, which reported a fall in profit due to pressure on the oil and gas business, the sample's net profit grew at a faster rate of 17.6% while revenue rose 8.3%. RIL's net consolidated profit excluding non-controlling interest fell 12.6% year-on-year to ₹16,971 crore in the March quarter despite a 12.9% increase in net sales at ₹3.3 lakh crore. The company's share in the total sample's revenue expanded to 33.5% from 33.1% a year ago while net profit share fell to 14.2% from 17.5% by similar comparison.

Banking and finance companies reported double-digit profit growth for the quarter, thereby, partially offsetting the impact of RIL's lower profit. Excluding the lending sector, the sample's net profit growth reduced to 9%while revenue growth improved to 11.4%. Banks and finance companies together contributed 28% and 47% to the total sample's revenue and net profit in the March quarter.

Operating margin for the total sample contracted to 22.3% from 22.9% year-on-year on account of lower profitability of lenders. Excluding them, the sample's operating margin improved to 17.9% from 17.1% a year ago.

The IT companies in the sample reported a strong 12.9% year-on-year growth in net profit compared with the 1.7% growth in the year-ago quarter. Their rupee denominated profit got a boost from weaker currency against major currencies in the world. The sector contributed 22% and 27% to the total sample's revenue and net profit respectively, similar to the previous year's comparable quarter.

At the beginning of the current results season, analysts had anticipated a high single-digit growth in aggregate net profit to be driven by automobiles, banking and finance and metals & mining companies. More companies are expected to declare results in the coming weeks, which is expected to bring more clarity to the quarterly trend analysis.