A total of 649 companies that have declared results for the September quarter showed net sales growth of 5.8 per cent year on year as against 9.6 per cent in the previous quarter. Recovery, however, is seen in operating profits, which have grown around six percentage points in the last two quarters.
Bottom line numbers turned around from a contraction of 1.9 per cent in the June quarter to 3.1 per cent growth in the September quarter. Raw material prices as a percentage of net sales inched up around one percentage points over the same period.
The trend reverses if commodity companies are excluded. The sample of companies excluding the commodity sector saw deterioration in both top line and bottom line. Profit after tax declined by 2.7 per cent. The basket of commodity companies saw double-digit growth in both operating and net profits. The performance of the commodity sector can be gauged from the outperformance of the Nifty commodity index compared to Nifty by around five times.