Q2 results review: Sales growth intact so far; may sway with laggards

ET Intelligence Group: Aggregate sales growth of companies that declared results in the September 2016 quarter so far has kept pace with that in the previous quarter whereas growth in operating and net profit has shown moderation.

Net sales of a sample of 563 companies excluding banking and finance, and oil and gas companies, rose 4.2% year-on-year compared with 4.3% growth a quarter ago. Operating profit grew by 10.2% in the second quarter, lower than 12.2% in the previous quarter while net profit growth halved to 6.1% by similar comparison.

Operating (PBDIT margin) and net margins were 21.5% and 11.1%, respectively, similar to that in the previous quarter.

“Volume growth trends have been mixed with cement and consumer (sectors) reporting tepid vol umes, while auto volumes have been healthy so far,“ mentioned Motilal Oswal Securities in a report on interim results review.

The IT sector contributed one fourth to revenue and one-third to net profit.This means the extent of growth will be altered and may even fall once large companies from sectors facing demand slack including capital goods, construction, metals, and power declare results in the coming weeks.