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Profits of Nifty Companies Are *Lower* by 9% in June Quarter, Which Is Probably Good News


The 50 Nifty companies have announced results. And we have the verdict, they mostly suck.
Here’s the chart. Click for a larger image.
Nifty Company Results
The Story:

  • Cement: ACC, Ambuja, Ultratech and Grasim did very well though the first two are coming from a lousy base last year.
  • Sun Pharma, Hindalco and Gail saw profits up 3x or more after a low base last year (when they lost a lot)
  • IT was no great shakes. Only Tech Mahindra had 28% profit growth, while TCs and Infy had sub-15% growth in Profits. And then,
  • Telecom did very badly. Idea and Airtel both saw their profits fall substantially, more than 30%.
  • Of the banks, HDFC Bank did its trademark 20% on profit growth, and Yes bank and Indusind Bank did even better. But Axis and ICICI saw profits shrink, as did SBI.

Overall, if we add up all the revenues, we see that these companies did about 5.6% more than last year. But profits are lower by 9%.
We have seen 8.7% Growth in March 2016, 15% Decline in Profits in Dec 2015 and so on. This doesn’t tell you how good the markets are – apparently they are expecting 25% growth in profits all over the Nifty universe!
This might just be good news. Because all bad news is good news. There will be a rate cut!

  • Bhushan says:

    1 – check Reliance numbers.
    2 – one suggestion on data presentation (!!!). In a column keep the number of decimal places constant (one decimal or two, but same for all numbers in the column). This makes it easier to read when you are comparing numbers in the column.

  • Shash says:

    If only rate cuts and QE actually helped to increase company profits 😉

  • T Srinagesh says:

    I find your presentation is refreshingly different. First it is quite direct. Then it does not have parrot words “goldilocks” and “sweet spot” etc. (thank God for that). It is also based by data. It is not like “those suits” (your word) saying Sensex is just 16 PE multiple but then the silent part is ( they don’t say) it is based earnings of 2018-19 (!) (like Dharmaraja killing Drona). I guess they believe in what I call Thermodynamics 5th Law “there is no paucity of fools any time and any place.”