This comes after a steep 40 per cent fall in the June quarter due to stringent nationwide lockdown.
The resurgence in corporate earnings is evident after four quarters of double-digit contraction. Sample this. Aggregate net profits of 3,095 companies reached a record high of Rs 1.45 lakh crore during the July-September quarter, growing over three times from the year-ago period. These were primarily on account of extraordinary transactions, though, aggregate net profit, net of prior period and extraordinary transactions (net of P&E) during the period too touched a high, registering a 46.2 per cent growth, year-on-year (y-o-y). This comes after a steep 40 per cent fall in the June quarter due to stringent nationwide lockdown.
The topline of the companies has declined in both the shutdown-infested quarters, 6.3 per cent in Q2FY21 and 27 per cent in Q1FY21.
Aggregate profit (net of P&E) of the sample of companies excluding banks and financial services rose to 37.6 per cent compared to 54 per cent plunge in the previous quarter, on a yearly basis.
Furthermore, margins expanded on continued cost cutting measures. While the total expenses of the companies reduced by 12.4 per cent compared to a 25 per cent squeeze in the first quarter, the net and the operating profit margins improved sequentially by 3 percentage points and 2 percentage points, respectively.
Interestingly, over 60 per cent companies in the revenue bracket of above Rs 10,000 crore have seen a y-o-y rise in their profits up to 1,293 per cent. More than half, or 53.5 per cent of the sample of companies within the revenue band of Rs 1,000 to Rs 10,000 crore have recorded a growth in their profits while the struggle for the ones below this threshold revenue limit still continues as only 41 per cent registered a bottom-line growth, on a y-o-y basis. Talking about the turnaround, 21 per cent of these firm has seen a reversal in their net earnings, on a sequential basis.