Mumbai: Indian companies reported the fastest pace of expansion in net sales in nine quarters and the best net profit growth in 18 quarters in the three months ended 30 June, indicating that a corporate turnaround may be under way after two years of subdued economic growth slashed earnings.

A Mint analysis of 285 companies in the BSE 500 index, for which comparable data was available for the last 25 quarters, showed that net sales in the June quarter rose by 9.79% from the year-earlier period. It was the fastest pace of growth since the quarter ended March 2012.

Net profit of these companies rose by 29.76% from a year before—the highest since the quarter ended March 2010.

The signs of improvement follow two consecutive years of sub-5% growth in Asia’s third largest economy that hurt consumer sentiment and forced companies to put investments on hold. Persistent inflation that kept borrowing costs high, and delays in mandatory government approvals and land acquisition that crimped cash flows, also eroded corporate earnings.

To be sure, net sales growth during the quarter was in line with the 9-11% forecast by analysts ahead of the earnings season. They also partly reflect a low year-ago base.

“The earnings may show a boost due to some sectors contributing hugely, mainly based on exports, and more so, some companies had posted losses last year in the same quarter," said Phani Sekhar, a fund manager at Angel Broking Pvt. Ltd.

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