India Inc earnings seem to have marginally recovered for the first quarter of 2016-17 with 16 sectors including cement and construction materials, consumer durables and engineering seeing positive growth in net profits after a negative base in same quarter of the previous fiscal.
According to a Care Ratings analysis of 1,180 companies, India Inc has witnessed a modest 2 per cent growth in sales and 0.9 per cent increase in net profits, during April-June quarter of the current fiscal over the same period a year-ago.
India Inc had recorded 0.7 per cent and (-) 0.3 per cent growth in sales and profits respectively in the same quarter of the previous fiscal.
"There appears to be some signs of recovery in growth in sales and profits of specific sectors," Care Ratings said.
"The fact that 43 sectors have witnessed positive growth in sales is encouraging. 31 of the 44 sectors had positive growth in profits," it noted adding that next 2 quarters will provide important clues on the recovery process.
It also observed that more sectors had positive growth in net sales in first quarter of the current fiscal as well as in the financial year 2015-16 compared with net profits.
Of the 53 industries surveyed by the rating agency, 16 industries with positive growth in net profit for first quarter of the current fiscal had improved over a negative base in the same quarter a year-ago.
These include - tea/coffee, consumer food, construction (real estate), hotel, resort and restaurants as well as pesticides and agrochemicals industry.
Besides, 13 industries such as banks, retailing, telecom, pharmaceuticals, power generation and agriculture have witnessed negative growth, for the quarter under review.
In terms of growth in sales, as many as 13 industries saw growth of over 10 per cent this quarter with the significant ones being IT (software), passenger cars and consumer food, while 10 sectors like metals, iron and steel, fertilisers, power generation witnessed negative growth.
A number of large companies in the banking and manufacturing sectors are still to publish their results.
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