Early-bird results signal a worrying December quarter

A worrying trend is emerging for India Inc. as the third-quarter results trickle in.

- Abhinaba Saha

Initial earnings suggest demand worsened in the three months through December, suggesting consumers further cut back on spending after a tepid second quarter.

A Mint analysis of the first 200 companies that have declared their results shows a 1.5% year-on-year drop in their topline. That contrasts with the 9% annual revenue growth these companies reported in the September quarter. Sequentially, revenue contracted nearly 7%.

Consumption had slowed in the second quarter ended September due to minimal government spending, sticky inflation and sluggish wage growth—reflected in India's GDP expansion cooling to a seven-quarter low of 5.4% in Q2. Investors hoped for a rebound during the festive and wedding season, but early numbers portend little relief ahead.