For all the worries around the West Asia war and input cost escalation, India Inc’s quarterly earnings have defied expectations. Results for the April-June quarter show broad-based growth in profits and at a pace exceeding analyst predictions.
For Nifty 50 companies, profits grew 18% year-on-year, the highest in 10 quarters, according to Motilal Oswal, while mid- and small-cap companies posted even better numbers. As many as 19 sectors beat projections, although fuel retailers were under pressure. The brokerage described the quarter as “picture perfect.”
Efforts to minimize oil supply disruption and its pass-through to retail prices held the war shock’s impact in check. Although the Gulf crisis is not over yet and it’s unclear if uneven rainfall will impact the ongoing quarter, there is reason to celebrate what looks like a long-awaited uptick in earnings that could support share prices and help India’s stock market snap a triple-dot trend: for three successive eves of Independence Day, starting in 2024, large-cap indices have been more or less flat.
If listed Indian companies can sustain a performance incline from here on, the odds of a breakout higher would improve.