Mint Primer | Can the market tide over the earnings slump?
Subscribe to enjoy similar stories. The Nifty50 index has tumbled 8% over the past six months. The Q3 results season offered little cheer, with multiple sectors witnessing muted topline growth amid domestic and global macro headwinds.
Can Dalal Street overcome the near-term hiccups? Mint explains: Overall, it was a lacklustre show. Adjusted net profit of the BSE-30 index increased 10% year-on-year, while that of the Nifty50 rose 8.8%. A large portion of the incremental growth in net profits of the Nifty50 index came from just two companies—Bharti Airtel and State Bank of India.
In the broader market, Q3 profit-after-tax growth for BSE500 firms (excluding oil marketing companies) remained weak at 8%, compared with 9% in the first half of FY25 and 21% in FY24. The topline rose just 8%, marking the seventh straight quarter of sub-10% growth. The most worrying trend is that demand slowdown has spread from export-oriented sectors to domestic consumption.
The profit gap between high-end and mass-market demand narrowed with stronger segments such as personal vehicles, hotels, durables and jewellery slowing, Nuvama Institutional Equities noted. IT firms’ earnings and toplines stabilized despite Q3 being seasonally weak, while industrials, telecom, pharma and chemical firms, too, posted a decent showing. Profit growth of small- and mid-caps—more exposed to domestic consumption—is now undershooting that of large-caps.
Read more: BSE: From bear market bait to global investment darling. Will it hold? Banks posted mixed earnings due to deceleration in loan growth, although benign credit costs aided profitability. Deposit mobilization remains a challenge.
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