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India Inc's profits moderate as consumption slowdown a worry
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IANS | 22 Feb, 2023
India Inc.'s profitability moderated in 3QFY23. Corporate earnings were
below expectations during the quarter dragged by Commodities while
Financials and Autos held the fort. Broad-based slowdown in Consumption,
both Staples and Discretionary, also hit corporate earnings, Motilal
Oswal Financial Services said in a report.
The
commentary for the consumer sector indicated continued weak rural
demand, but most of the companies also stated that there were some green
shoots on rural consumption towards the end of the quarter that
persisted into January 2023.
There was also hope expressed that
the likely good Rabi harvest along with a decline in CPI inflation would
spur staples demand, albeit, gradually. Commodity cost deflation, on
the other hand, barring palm oil and some crude derivatives (such as
VAM) is not reducing to the extent that was expected, thereby delaying
gross margin recovery.
The clear disappointment was caused by the
sudden decline in discretionary consumption even in urban areas and
corporate commentary suggested that while December and January were not
as bad as November 2022 in terms of demand slowdown, it still remains
sluggish with lack of clarity on the time of revival, the report said.
Most
of the Banks have guided for a sustained momentum in loan growth
powered by continuous traction in the retail, business banking and SME
segments. Corporate segment is witnessing a healthy recovery driven by
working capital loans and a healthy pipeline of sanctions.
The
Lending Institutions guided for a sustained momentum in disbursements
across product segments even though there was some sluggishness in prime
mortgages. Within vehicle finance, disbursements remained strong across
product segments though the 2W volumes have not yet fully recovered.
Higher interest rates impacted demand for prime mortgages adversely but
demand for affordable housing loans continued to remain strong.
(Sanjeev Sharma can be reached at Sanjeev.s@ians.in)
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
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64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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