A turn in the tide

India Inc's Q2 results point to pain ahead

Global recessionary conditions, inflation, and interest rate hikes led to a disappointing quarter (July-September or Q2FY23) for India Inc. The results of a sample of 3,332 listed companies indicate widespread margin pressures and perhaps the end of the de-leveraging cycle, which started in the first half (April-September) of 2020-21.

Banks and non-banking financial companies (NBFCs) did well during the quarter because the rate hikes were not fully transmitted, leading to higher net-interest margins (NIMs). The NIM is likely to normalise in the second half of the current financial year because lenders have started hiking deposit rates.
 

The commodity cycle is weak.