InvestorQ : How have corporate results been in the first quarter in terms of results that have been declared till date?
diksha shah made post

How have corporate results been in the first quarter in terms of results that have been declared till date?

Answer
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3 weeks ago


The good news appears to be that while top line has been affected, the impact on the bottom line is a lot lower due to the positive impact of cost cuts. This is confirmed by a recent report by ICRA, India’s second largest rating agency.

According to the report, the overall corporate revenues for the first quarter for a sample of nearly 500 companies were sharply lower by 31%. However, the impact on operating margins or OPMs was not so impactful as costs were managed quite well.

In fact, the pre-tax margin of the group of 500 companies was only marginally lower at 3.6% in the Jun-20 quarter. Sectors like airlines, trade, hotels and automotive were the worst impacted while sectors like FMCG were less impacted by the COVID turmoil.

To a substantial degree, the cost controls initiated by most of the large and medium sized Indian companies helped. In addition, the tax reduction given last year in September cutting rates of taxes to 22% flat also cushioned the impact.