Business

Surging costs eat into profitability of India Inc even as revenue, profits rise

By Dan Neff

The cost inflation overshadowed the sustained trend of strong double-digit growth in revenue and profit. For the March quarter, the total sample’s revenue grew by 22.2% compared with the 16% growth in the year-ago quarter.

Synopsis

The operating margin of a common sample of 2,601 companies in the March quarter fell by 350 basis points year-on-year to an eight quarter low of 17.6%.

India Inc is reeling under severe input cost pressure amid escalated prices of fuels and other commodities. This is affecting profitability despite sustained topline growth. Analysts expect operating margins to remain under pressure as not all companies would be able to pass on the entire cost burden to consumers.

The operating margin of a common sample of 2,601 companies in the March quarter fell by 350 basis points year-on-year to an eight

BY

ET Bureau

4 mins read, Last Updated:

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Dan Neff