Experts attribute this to a surge in retail lending (the term for lending to individuals), a large part of which is used to finance the purchase of big-ticket consumer items, such as household appliances, two-wheelers or cars.
The combined net profit for all companies
was up 13.8 per cent year-on-year (YoY); net sales (net interest income for financials) was up 21.4 per cent – the best in at least three years. Ex-financials and energy, total net profit was up 16.6 per cent, lowest in three quarters; revenue was up 15.4 per cent –best, again, in at least three years.
Domestic market-focused companies
(excluding financials, energy, information technology, metals and pharmaceuticals) did well with 13.7 per cent YoY growth in revenue. This was the highest in 12 quarters; however, their earnings growth at 15.1 per cent was the lowest over the past three.
was excluded from this list, as Jaguar Land Rover, its UK-based arm, brings most of the company’s revenue.
Analysts blame the weakness in home- focused firms on the creeping rise in commodity and energy prices that is eating into manufacturers’ margins.
Raw materials, power and fuel cost grew faster than domestic companies’ revenues for seven quarters in a row, biting into their margins. Any further rally in commodity prices could be a pressure point for corporate earnings in the coming quarters.