Continuing with the visible trends in the Indian economy, a majority of companies in the country will end up reporting much slower revenue growth of their businesses in this financial year 2019-20, possibly the lowest in the past four years.
ET Intelligence Group, a team of analysts at Economic Times, has put together a bunch of matrices comparing this financial year’s (April 2019- Mar 2020) numbers against the same period the previous year. It has been a double whammy for the businesses since the economy chose to grow slowly on one side and the high corresponding numbers for the previous year. So, the demand for goods and services slackened and these are pitted against some solid figures for the previous year showing them in even poorer light than they actually are. Some 423 companies were included for this study and their financial figures tabulated for four financial years beginning 2014.
Take this example, companies listed in the BSE 500 recorded a growth of 2.4% on an average in the first three quarters of the year, April 2019-December 2019. Now, the growth recorded the previous year as a whole, was 17.5%. Even if the companies did better in the remaining 3 months of the FY20, there’s no way they are going to reach anywhere close to their last year’s record.
Some of the sectors which fared poorly in this 9-month period include automotive and ancillaries, cement, construction, metals and oil and gas. These sectors grew by 29.3% the previous fiscal.
The dismal showing gets reflected in the net profit figures too. The AGR (Adjusted Gross Revenue) dues bomb that fell on the telecom companies caused their profits to go into the red, pulling most of the others down in the bargain.
The reduction in the corporate tax midway through the year has definitely helped a number of companies to show higher profits than the previous year.