Saturday, 19 August 2017

India Inc profit dips 11% in Q1 on GST destocking

The impending goods and services tax (GST) regime has made a dent on India Inc' earnings for the April-June period, with profit growth falling to a five quarter low of 11 per cent, says a Morgan Stanley report. 

According to the global brokerage firm, GST, which was executed on July 1, adversely affected net profits growth for the first quarter of the current fiscal, with companies in the materials, consumer discretionary sharing bulk of the burden. 
Financials, utilities, technology and telecom sector companies did not report impact of GST on their earnings either in their earnings release or the management commentary. 

However, corporates' revenues saw strong growth at 10 per cent, the highest in last 12 quarters, for April-June period of 2017, compared to same period year-ago. 

At the sector level, commodity linked sectors (energy, materials and utilities) and industrials reported the strongest revenue growth, while telecom, consumer discretionary saw the most decline in net profits. 

For an even broader sample of 2,629 companies, revenue rose 9 per cent and net profit growth fell 11 per cent year-on-year, it said. 

Further, Sensex companies saw revenue growth of 5 per cent and fall in net profit growth of 6 per cent, for the period under review .

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