Few cheers in early-bird results

Revenue, profit performance worst in 16 quarters; one-time gains boost overall income

- KRISHNA KANT

The early-bird results for the April-June 2025 quarter (Q1FY26) suggest a further weakening in demand in the economy, with India Inc increasingly depending on other and non-core income to drive profitability.

Net sales (gross interest income for banks) of early-bird companies grew at their slowest pace in at least 16 quarters. Revenue slowdown, coupled with faster growth in operating expenses like employee costs and overheads, hit the bottom line.

The combined profit before tax (PBT), excluding other income, contracted 10.3 per cent year-on-year (Y-o-Y) in Q1FY26, their worst showing since the Covid-19 pandemic.

However, overall earnings were boosted by a sharp surge in other income and one-time gains, such as profits from sales of assets. Their core earnings in Q1 remained under pressure despite gains from lower commodity and energy prices that helped expand margins during the quarter. Raw material costs for companies, excluding banks, were down 10.1 per cent Y-o-Y in Q1FY26.