Revival of Corporate Earnings

What is the issue?

Corporate earnings has rebounded to an appreciable extent after a low customer base created by the demonetisation and GST.

What is the status of corporate earnings?

• Recent analysis shows corporate earnings of Q3 (October-December 2017) of Indian economy has recovered.
• Sales have grown a commendable 12.8 per cent, while other income rose 28 per cent.
• Operating profits rose by 14.4 per cent and, net profits have grown by 24.7 per cent, and the revival is spread across several sectors.

What is the status of goods and services industries?

• Most automobile majors have reported an improved performance than expected.
• Fast-moving consumer goods companies, which represent low- consumption have also seen improvement.
• Sales in capital goods sector where rose by 19 per cent which indicates some sort of revival in the investment climate.
• Offtake in cement and steel is heavily driven by construction, which, in turn, is driven by infrastructure project activity.
• Export driven industries such as pharmaceuticals and software, continue to deliver results under par.
• The telecom sector remains under pressure due to the tussles between the competitors which is expected to recover soon.
• Thus overall corporate results show an encouraging trendparticularly those dominated by public sector undertakings.

Source: Business Standard