Early birds steady wings after a dip in December quarter

A cautiously hopeful tone prevails in the stock market as March quarter earnings trickle in. Initial earnings suggest that companies emerged from a demand contraction in the quarter, though the recovery remains muted.

- Abhinaba Saha

This indicates that consumer spending is yet to pick up meaningfully, after a tepid third quarter. Extreme global uncertainty in the last three months depressed exports and hurt businesses, experts noted.

A Mint analysis of the first 184 companies that have declared their results shows only a 1.4% year-on-year increase in revenue. That fares marginally better than the 0.3% drop they reported in the December quarter. Sequentially, revenue rose around 8%, but on a low base.

"After a disappointing Q2 and Q3, our expectation for this quarter (Q4FY25) is so low that the actual numbers are looking either in line, or marginally better than what we expected," highlighted Nikhil Rungta, co-chief investment officer of equities at LIC MF.

India Inc. has been reeling under a stubborn consumption slowdown since last year due to minimal government spending, sticky inflation and sluggish wage growth. However, much has changed, and a recovery seems to be on the way reflected in India's 6.2% GDP expansion in Q3 from a seven-quarter low of 5.4% in Q2. Retail inflation fell to a sixyear low of 3.3% in March. Government spending has picked up since December, even though it is in select critical areas like defence and power.

Meanwhile, experts are hoping to see a revival in urban middle class spending in FY26 after the income tax relief offered in the Union Budget.