A year after demonetisation-induced economic disruption, corporate earnings are yet to move into high gear as expected by the Street. Companies focused on the domestic market, especially consumer goods players, have recovered some of their mojo in the third quarter ended December 2017 (Q3FY18), but their numbers, too, fail to sizzle despite a favourable or low base-effect. Worse, on the cost side, higher energy and commodity prices have begun to bite domestic manufacturers, with companies reporting an increase in per unit cost of raw materials and energy.
The combined net profit of the 1,395 companies, which have declared their results for the October-December 2017 period, was up 10.6 per cent year-on-year (YoY), much lower than the 28.6 per cent YoY growth witnessed during the corresponding quarter last fiscal year (FY17). This is despite their combined net sales going up 14.6 per cent YoY, the fastest growth in the last 13 quarters. In comparison, net sales were up 7.4 per cent YoY for the quarter ended December 2016, while it had increased by 10.5 per cent YoY during the July-September 2017 period.
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