Consolidated revenues of 1,243 companies down 5.26% in the September 2015 quarter

Jason Monteiro 17 November 2015

Despite the fall in revenues, the consolidated net profit of the 1,243 companies rose 2.64% due to improved profit margins

Out of Moneylife’s database of 1,368 companies, 1,243 companies (or 90%) have declared their September 2015 quarter results. The consolidated revenues (standalone) reported by the 1,200-odd companies declined by 5.26% to Rs12.76 lakh crore in Q2FY16, from Rs13.47 lakh crore in Q2FY15. The consolidated operating profit grew by 6.92% to Rs1.94 lakh crore from Rs1.81 lakh crore over the same period. Operating profit margins improved to 15% in the latest quarter from 13% a year ago. The consolidated net profit too increased by 2.64% to Rs1.01 lakh crore from Rs0.98 lakh crore.

Disappointed by the poor quarterly performance and other global factors, the market-cap of these companies too has eroded. The consolidated market-cap of the 1,243 companies declined by 1.61% to Rs91.87 lakh crore as on 13 November 2015 from Rs93.38 lakh crore as on 13 November 2014. Valuations which were considerably high over the past year have eased slightly. In terms of market-cap to net-profit (MC/NP or price-to-earnings), the valuations declined to 22.71 times as on 13 November 2015 from 23.69 times a year ago.

Out of the 1,243 companies, as many as, 55% or 684 companies reported a growth in revenues. As many as 30% companies present in the list were able to generate a revenue growth in excess of 10% over the previous quarter.

Coming to the Nifty 50—the consolidated revenue of the 50 companies declined by 3.86% to Rs5.24 lakh crore in Q2FY15, from Rs5.46 lakh crore in Q2FY14. The consolidated operating profit increased by 8.84% to Rs1.08 lakh crore from Rs0.99 lakh crore over the same period. Operating profit margins improved to 21% from 18% in the quarter a year ago, thanks to lower input costs. Consolidated net profit too increased by around 6% to Rs0.68 lakh crore from Rs0.64 lakh crore over the same period.

Stock prices of the top 50 companies have been on a decline. The consolidated market-cap of the Nifty 50 stocks declined by 6.57% to Rs53 lakh crore as on 13 November 2015 from Rs56.73 lakh crore as on 13 November 2014. The consolidated valuations, defined by MC/NP, fell to 19.33 times from 22 times a year ago.

As many as 20 companies of the Nifty 50 report a revenue growth in excess of 10%. Among the pharma companies Cipla, Dr Reddy's Lab and Lupin reported a standalone revenue growth in excess of 10%. Revenue of Cipla grew by 23.4% year-on-year in the September quarter to Rs3,073 crore, while its net profit grew by 21% to Rs407 crore over the same period. Dr Reddy's Lab reported a revenue growth of 16% and a net profit growth of 49%, while Lupin reported a sales growth and profit growth of 11.9% and 7.4% respectively.

In the auto segment, Maruti Suzuki reported a revenue growth of 13% at Rs13,933 crore in September 2015 and a net profit growth of 42% over the same period. The operating profit margin of the car manufacturer increase to 16% in the latest quarter from 12% in the quarter a year ago.

In the telecom space, while the revenues of Idea Cellular grew by 15% over the year to Rs8,644 crore, the revenues of Bharti Airtel grew at a slower pace of 9.2% over the same period to Rs14,824 crore. Among the software companies, Infosys and TCS reported a revenue growth of 14% and 17.6% respectively. Infosys reported an operating profit growth of 13% while TCS reported an operating profit growth of 19%.

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