New Delhi: Defying the growth momentum in overall economy, corporate giants including M&M and Sun Pharma as well as state-run behemoths like NTPC, SAIL and IOC today announced lower quarterly profits, while many others have fared even worse due to rising costs and weak consumer demand.
For Mahindra and Mahindra, unseasonal rains played the spoilsport as rural economy took a hit and impacted its key tractor business, while similar has been the case for another tractor manufacturer Escorts Ltd.
Things appear to be no better for Sun Pharmaceuticals, which has been fast emerging as a pharma multi-national giant from India, as its net profit plunged almost 45 percent to Rs 888 crore in the fourth quarter ended March 31.
State-run NTPC's net profit also dipped by 5 percent to Rs 2,944.03 crore in the same quarter due to higher depreciation, among other reasons.
SAIL reported much deeper plunge of 26 percent in its fourth quarter net profit to Rs 334 crore, while its total income declined by 13 percent to Rs 11,684 crore.
For another PSU giant Indian Oil, the quarterly net profit fell by one-third as it received lumpsum subsidy in the same period of previous fiscal.
The current earnings season has been bad for a host of other companies as well, including public sector behemoths like NMDC, Bank of India, Coal India and ONGC which announced their results yesterday.
Similar was the case for Hindalco, Wockhardt, Omaxe, United Breweries and Bajaj Hindustan from the private sector.
The disappointing results from the corporates came on a day when the government announced that the economy grew by 7.3 percent in 2014-15, up from 6.9 percent in the previous fiscal, while the growth rate was even higher at 7.5 percent in January-March quarter.
Among those announcing their results today, homegrown auto major Mahindra & Mahindra reported a 38.61 percent decline in standalone net profit at Rs 550.56 crore, hurt by slowdown in automotive and farm equipment segments. This is the biggest fall in fourth-quarter profits in over six years.
Net sales fell to Rs 9,411.52 crore as against Rs 10,837.89 crore in the year-ago quarter, down 13.16 percent.
"The prevailing economic conditions combined with subdued consumer interest affected performance of companies in the group," Mahindra & Mahindra said.
Hurt by higher depreciation expenses, automotive component manufacturer Bosch reported a 11.90 percent decline in net profit at Rs 287.45 crore for the quarter ended March 2015.
On growth outlook, Bosch MD Steffen Berns said: "The market performance of the coming quarters will be determined by factors such as monsoon, fuel prices, interest rates and speed of execution of government reforms.
"We expect moderate growth in the automotive industry and remain cautiously optimistic about the Indian market this year," he said.