Overall sales revenues and net profits hardly changed. Net sales of Rs 8,07,083 crore (excluding other income), stagnated with a nominal 0.4 per cent rise in Q1, 2015-16, over the Rs 8,04,164 crore registered in the same period of 2014-15. Net profits (adjusted for extraordinary items) saw a 0.3 per cent rise at Rs 76,099 crore in Q1, 2015-16, over Rs 75,878 crore in the corresponding period of 2014-15. Worryingly, net sales for non-banking businesses fell 1.5 per cent year on year; and interest costs for non-banking businesses rose 14 per cent. Net profit margins were at nine per cent of sales, while interest costs amounted to 5.6 per cent of sales, rising from 4.9 per cent of sales in 2014-15. Incidentally, profits for 29 banks dropped to Rs 14,476 crore this quarter from Rs 15,953 crore. Credit disbursed rose just nine per cent - the lowest quarterly credit growth in many years. Profits eroded mainly due to enhanced provisioning for non-performing loans, in public sector banks like Bank of India, Punjab National Bank, Bank of Baroda and Canara Bank.
Interestingly, there was a heartening performance from car makers. Eight automobile manufacturers registered a 42 per cent improvement in profits and a 12 per cent improvement in sales. Auto ancillaries and tyre manufacturers also did well. Also, housing finance majors HDFC, LIC Housing, Dewan Housing and Indiabulls Housing delivered enhanced profits (up 18 per cent for these four) and better volumes (sales up 17 per cent), implying an uptick in residential realty. Among capital goods manufacturers, Siemens delivered a standout performance in terms of improved profitability and Suzlon reduced losses considerably. Textiles saw profits up by 92 per cent for a sample of 84 companies - although sales have fallen by four per cent. But the good news ends there. The information technology and pharma industries have flat results, with the former registering a 6.7 per cent rise in total net profits for 58 companies and the latter registering a 7.8 per cent rise in profits for 44 companies. Telecom service providers also had flat results, as did those in the power generation business. Cement is in dreadful trouble with profits down 22 per cent, even though sales rose two per cent. Steel also saw profits dip 85 per cent.
Summing up, this quarter may, in automobiles in particular, hint at the first signs of consumption recovery. But weakness persists across the core sector, in banking and in key infrastructure-related areas. It will be a long haul from here to a full-blown corporate rebound.