MUMBAI: If BFSIs were to be excluded, corporate sales in Q2 FY24 would register a half percentage point decline in sales even though overall profits rose nearly 30% due to drop in expenses. If banks and finance companies are included, the sales are up 2.8% while profit increase remains unchanged at close to 30%, according to a study of corporate performance.
Bank of Baroda analysed the performance of the top 3,265 companies. “While banks and service-related sectors benefited from higher credit offtake and pent-up demand, signs of stress were visible in certain pockets. Consumer-oriented industries such as FMCG noted muted growth as rural demand continues to lag,” BoB’s corporate performance report said.
The companies that reported declining sales but double-digit profit growth included those in crude oil, gas transmission, industrial gases & fuels and logistics. In comparison, companies in trading, textiles, plastics, paper, chemicals, insurance and diversified businesses recorded a decline in sales and profits.
Banks and finance companies and those in media & entertainment recorded more than 20% growth in sales and profits. Other companies recording double-digit increases in sales and profits were in automobiles, capital goods, construction, electricals, hospitality, infrastructure and realty.
Banks and finance companies skew overall numbers because they form 17.5% of the total Rs 28.8 lakh crore sales. The decline in sales in the non-financial sector is driven by crude oil, which saw a drop of 8.6% in sales and chemicals, which declined by 12.6%. Companies in trading saw the most significant decrease of 29.3% in sales.
