48 Out of the 50 Nifty companies have announced their September quarter results. Nifty aggregate profits are down by 6.04%, even with a revenue growth of 8.42%.
Here’s the chart, Click for the larger image.
Some might say so much of this is one-time etc. But when you have one-timers every quarter, you have to ignore the one-timers. We will never have a quarter without one or two companies showing a horrible set of results, but the idea is that the others make up for it. And for nearly six quarters now, we have seen very low profit growth or profit contraction in the Nifty companies, on aggregate.
For the previous quarter as well the profits were down by 9%. And with the demonetisation scheme around, their has been restricted cash flow among consumers, so lower spending is expected. This will show up in December quarter results, though the impact is unknown.
A correction in the markets, regardless of demonetization, should be expected.