Amid ongoing economic slowdown, Care Ratings in its latest report stated that this slowdown has started hurting corporates as well, with companies reporting a sharp decline in both revenue and profit growth numbers in first quarter of the fiscal year 2019-20 (Q1FY20). India Inc's net sales growth for Q1 slid to 4.6% as against 13.5% for the same period last year, while the net profit growth moderated to 6.6% as compared to last year's 24.6%.
The report, which is based on an analysis of 2,976 companies reporting their quarterly numbers, said that the Q1FY20 has been marked by disappointing and weak corporate earnings indicative of the overall slowdown in various industries and the economy. In what can be termed as a silver lining, the broader economic woes do not seem to have had an impact on the orgnaised sector jobs, as the employee expenses growth continued to be stable. Employees compensation grew 10.6% as compared to the year-ago period.
Care Ratings said it can be noted that GDP growth slid to a five-year low of 5.8% for the March quarter and is widely expected to come lower for the June quarter. There have also been reports of jobless growth and a skewed nature of economic growth, where the ‘have-nots’ are being left behind. From the operating profit growth perspective, the study showed a slide down to 4.1% in June quarter as against double digit growth last year. However, the operating profit margin was stable at about 20% level.
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