India’s corporate earnings season for the April-June quarter, underway since last week, gathers pace through July, with Reliance Industries reporting on Friday and HDFC Bank, ICICI Bank and Kotak Mahindra Bank following on Saturday.Results so far show a mixed pattern. Profits have grown consistently, but some companies have missed analyst estimates.Corporate revenue is estimated to grow 11-11.5% in Q1 FY27, according to Crisil, despite supply disruptions and higher input costs stemming from the West Asia conflict. Domestic demand held up, allowing companies to pass on the burden to consumers.Pricing, rather than volume, is behind much of the growth this quarter – a reversal from the past two years, said Sehul Bhatt, director-research at Crisil.Automobiles, white goods, telecom services, power generation, steel and healthcare drew support from resilient domestic demand.Intense summer heat drove demand for seasonal appliances like air conditioners, after rains dampened sales a year earlier. Power gained from peak seasonal demand, and telecom from premiumisation and data monetisation. Steel was bolstered by stronger prices; cement was cushioned against cost increases through price hikes.Nuvoco Vistas Corp posted a 7% growth in operating profit to Rs 572 crore in Q1 FY27 – the building materials major’s highest-ever first-quarter operating profit. MD Jayakumar Krishnaswamy credited cost discipline and operational efficiencies.Construction was a laggard. Sector revenue is estimated to be up just 1-3% as geopolitical disruptions slowed project execution and delayed revenue recognition despite healthy order books. L&T will declare Q1 FY27 numbers on July 28.FMCG revenue is estimated to grow 6-7% on price increases, though higher packaging, logistics and food-related costs weighed on profitability. Nestle India, CCL Products and Varun Beverages are expected to outperform peers, according to Axis Securities.“We will have double digit value growth in Q1,” said Abhijit Roy, MD at Berger Paints, pointing to an even stronger second and third quarter, improving on a weak year-ago period when excessive rainfall and an early Diwali shortened the festive selling season. Exporters bore the brunt. Textiles, pharmaceuticals and processed food faced disruption from higher freight rates and longer shipping schedules. Pharmaceuticals held up better, with revenue estimated to grow 12% on domestic demand, new launches and exports to semi-regulated markets, even as input and logistics costs, plus US pricing pressure, weighed on margins.
Revenue Estimated To Grow 11-11.5% Despite Supply Disruptions, Higher Input Costs: Crisil
IT services revenue is estimated to grow 5%, driven largely by favourable currency movements as enterprises stayed cautious on spending. TCS’s Q1 FY27 profit was up about 5% to Rs 13,349 crore, while Wipro’s was flat at Rs 3,356 crore. Infosys will declare earnings on July 23.Tata Motors’ passenger vehicles may report weaker results on continued challenges at Jaguar Land Rover, while Hyundai could see some moderation.Corporate operating profit margin is estimated to contract 75-100 basis points on-year, as companies absorbed part of the cost rise rather than passing it all on, according to Crisil.Airlines were hit hardest: aviation turbine fuel costs rose even as passenger traffic softened, driving an estimated 1,000 basis point decline in operating profit margin. Non-banking financial companies, by contrast, enter the results season on firmer footing, with better margins and asset quality after facing retail lending stress.Crisil flagged three factors that will shape corporate earnings trajectory ahead: the balancing of further price hikes with demand; recovering costs without losing volumes; and seeing relief in fuel, freight and raw material pressures. The monsoon’s bearing on rural demand and food inflation, alongside the West Asia conflict’s effect on energy prices will also be closely watched.Should uncertainty in West Asia persist, margin pressure could deepen further in the second quarter, though the festive season is expected to support demand into the back half of the year.(Reeba Zachariah, Asmita Dey, G Balachandar, Rupali Mukherjee and Udit Prasanna Mukherjee contributed to this story)
