India Inc posts weak profit growth

EARNINGS SEASON HAS got off to a sedate start with no big surprises so far.

- KISHOR KADAM

Although topline growth has been fairly good, the aggregate operating and net profit numbers have been subdued, partly impacted by the new Wage Code rules.The results for the December 2025 quarter - the peak festive and wedding season - do not suggest any big jump in consumer spends, despite the income tax giveaways and cuts in the GST rates. Of course, the split in the festive season, between Q2 and Q3, would have impacted business somewhat. Exporters have been gainers in a quarter in which the rupee depreciated sharply.

For a sample of 284 companies (excluding banks and financials, HPCL and BPCL), net profits for Q3FY26 were up 5.1% year-on-year (yo-y) - that's the slowest growth in at least four quarters and despite a strong 12.6% rise in net sales.

OPERATING PROFIT MARGINS contracted by about 90 basis points, thanks to expenses having risen by 13.8% y-o-y, leaving the increase in operating profits at just 7% y-o-y.