New Delhi, Aug 13 (IANS) India Inc’s aggregate revenues grew 22 per cent year-on-year (YoY) in the June quarter of FY27, accelerating from 13 per cent growth in the previous quarter (Q4 FY26), driven by commodity price inflation, strong consumption and sustained demand in sectors such as automobiles, a report said on Thursday.
According to an ICRA report, the sharp improvement was driven by higher commodity and bullion prices, continued demand support from last year’s GST rate cuts that benefited the automobile sector, and resilient consumer spending despite concerns related to tensions in West Asia and the impact of El Nino.
Despite robust revenue growth, profitability came under pressure. Aggregate operating profit margins (OPM) contracted by more than 200 basis points year-on-year during the quarter, while net profit growth remained largely flat.
The weakness was mainly attributed to the oil refining sector, where elevated crude oil prices and losses on LPG and petroleum product sales weighed on earnings.
Excluding the oil and gas sector, however, the picture was considerably stronger. Operating margins remained stable at around 19 per cent, while net profits increased by more than 20 per cent year-on-year.
ICRA noted that consumption-linked sectors emerged as key growth drivers during the quarter.
Automobile original equipment manufacturers (OEMs) recorded the strongest revenue growth, while fast-moving consumer goods (FMCG), consumer durables, apparel and grocery retail, jewellery retail and quick-service restaurant chains also reported healthy performance.
Commenting on the trends, Jitin Makkar, Senior Vice President and Group Head-Corporate Ratings at ICRA, said concerns about a potential demand and cost shock at the start of the quarter eventually had only a limited impact on business performance.
“Though concerns over a demand-and-cost shock weighed on sentiments at the beginning of the quarter, the eventual impact was limited. Consumption-led sectors were among the key growth drivers,” he stated.
“While automobile original equipment manufacturers (OEMs) recorded the strongest revenue growth, several other consumer-oriented sectors including FMCG, consumer durables, apparel and grocery retail, jewellery retail and quick-service restaurants also reported healthy performance,” Makkar mentioned.
–IANS
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