Q2 roundup: Indian cos get festive boost; almost 62% post profit rise

Shoppers Stop

10/11/2022 07:53

By Nivedita Bhattacharjee and Gaurav Dogra
       BENGALURU, Nov 10 (Reuters) - Almost two-thirds of the
near 200 Indian companies with market capitalization of $100
million and more have reported a rise in profit for the
September quarter, data tracked by Reuters showed
        Of the 191 companies tracked, 118 reported a rise in
profit, Refinitiv data showed, with almost 90% of those logging
in a rise in quarterly revenue. 
  
        Apparel retailers, restaurants, banks, construction
companies all saw a rise in sales and orders, as the country
geared up for the first pandemic-free festive season in two
years.
    Consumers bought up food and other supplies even through
burning price inflation.  
    "There is definitely a festive boost which cannot be denied
and which is reflected in earnings performance," said Vivek
Kumar, economist at Mumbai-based QuantEco Research.
    "There was also some comfort on input prices moderating in
the quarter, and a boost from pent-up demand. All these factors
came together to help." 
    Retail sales in India peaks during Diwali, the festival of
lights, when Indians usually splurge on apparel, accessories,
consumer goods and automobiles. This year's Diwali fell on Oct.
24.  
    "It's the first Diwali after COVID where people are able to
get out and mingle with their friends and family and that's
definitely helping," Shoppers Stop Ltd  SHOP.NS  Chief Executive
Officer Venu Nair told Reuters, after the department store chain
 posted a profit in the September quarter, over a loss in the
year ago.  urn:newsml:reuters.com:*:nL4N31L2AI
    Nair said he expects sales in the festive quarter to top
pre-pandemic levels.
    Maruti Suzuki, India's top carmaker, reported a four-fold
jump in quarterly profit, while construction bellwether Larsen &
Toubro Ltd  LART.NS  saw a spike in order inflows on a
resurgence in investments in infrastructure, with several
buildings, factories, metros, and other project works underway
as Covid-related restrictions eased. 
        L&T's earnings are often seen by analysts as a proxy to
the capital expenditure in the economy, as it undertakes public
and private infrastructure projects.
  
        India's capital expenditure rose almost 50% over last
year to 3.43 trillion rupees in the April-September period,
government data showed.
  
        Meanwhile, Anarock Property Consultants predicts housing
sales this year to breach the previous peak of 2014 led by
strong momentum in festive demand and robust performance in the
first three quarters. 
     Restaurant revenues rose more than 90% over last year,
followed by apparel and accessories, power, construction,
chemicals, banks and autos, Refinitiv data showed. 
    State Bank of India (SBI)  SBI.NS , the country's largest
lender, reported record quarterly profit and forecast credit
growth to remain in double-digits.
        "In (an) uncertain and fragile global economic
environment, the Indian economy has showed resilience," SBI
Chairman Dinesh Kumar Khara said in an earnings conference call.
  
        Indicators of aggregate demand show that the onset of
festive season and the pent-up demand kept growth impulse very
strong, he added.
  
        Even those companies, including Adani Wilmar  ADAW.NS ,
owner of the Fortune cooking oil brand, whose demand in rural
India has been tepid, have said 
    sales are rebounding
     on the back of easing prices of a few essentials and late
revival in monsoon rains.
  
    India's retail inflation accelerated in September to a
five-month high of 7.41% as food prices surged, but analysts
said most of the impact has been baked into estimates by
markets, as well as customers. 
    "Inflation is in amber zone currently and is expected to
transition to the green zone in next two quarters," QuantEco's
Kumar said.
    India's inflation likely slowed to 6.73% in October on
weaker food prices and a strong base a year ago, a Reuters poll
of economists predicted. 
    "With monetary policy response already attuned to it, the
impact on domestic demand conditions is likely to be mild,"
Kumar added.
    "The anticipated sharp slowdown in external demand will be a
dampener for earnings in the upcoming quarters."
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Financials lead Q2 profit gains for Indian companies    https://tmsnrt.rs/3NP5rzk
Nearly 90% of Indian companies report topline increases    https://tmsnrt.rs/3DQAjeo
Most Indian companies report upbeat Q2 profits    https://tmsnrt.rs/3UMpbWq
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Nivedita Bhattacharjee in Bengaluru; Additional
reporting by Praveen Paramasivam and Aftab Ahmed in New Delhi;
Editing by Dhanya Ann Thoppil)
 ((Nivedita.Bhattacharjee@thomsonreuters.com; Mobile: +91
9920455129; Twitter: @tweetsfromnivi;))