India Inc Q1 results: Nifty reports slowest revenue growth in 10 quarters but PAT gives adrenaline rush

economictimes.indiatimes.com:

India Inc's first quarter of FY24 wrapped up this week. Given the high base effect of the previous year’s June quarter, the revenue of Nifty 50 rose by 5% YoY in Q1FY24, representing the slowest growth in ten quarters. On the other hand, the profitability witnessed an adrenaline rush, recording the highest yearly growth of 33% in six quarters.

The companies have reaped benefits from the decline in input costs, resulting in the expansion of margins. Nifty 50's journey resembled a rollercoaster, with some sectors shining while others were disappointed. Taking a closer look at India Inc's sectoral performance during Q1FY24: Once again walking away with top honors are the Banks and Automobiles sectors, exhibiting remarkable growth in revenue and profits.

The Infrastructure sector posted an impressive profit growth of 157% YoY, thanks to the cooling raw material prices. The increasing economic activities in India will bring more investments into the sector ahead. Talking about banks, it is now a known fact that the repo rates have peaked and thus there is negligible scope for Net Interest margins to improve from these levels.

However, the latest RBI MPC meeting indicates that the rate cuts are farther than expected meaning the banks could enjoy higher rates on their loans for longer. Further, the Advances environment remains robust, and the continued reductions in credit costs would aid to offset the impact of margins on ROA. The business environment continues to be favorable for banks across the product portfolio.