Losing steam

Second wave could derail strong corporate recovery

The Q4 (January-March) 2020-21 results of a sample of 433 listed companies suggest that corporate recovery has gathered steam. Although higher sales revenues and strong growth in profits have been reported, an analysis of the results must start with multiple caveats. In late March 2020, economic activity was truncated by the lockdown, leading to a lower base. The first quarter of 2020-21 was also hit by lockdown, so the base effect will be more pronounced. On the other hand, while Q4 2020-21 saw some restoration of normalcy, the second wave will severely impact economic activity in the ongoing financial year.