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Informist, Wednesday, Jun. 4, 2025

 

By Anand JC

 

NEW DELHI – For the quarter ended March, the top line growth of Nifty 200 companies was the highest in three quarters on year and the bottom line growth was highest in four quarters, excluding one-time gains and losses. However, this was the weakest March quarter for these companies since at least 2021-22 (Apr-Mar), according an analysis by Informist.

 

The net profit of the Nifty 200 companies grew nearly 15% on year in the March quarter but was slower than the 18% growth in the December quarter. Excluding one-time gains and losses, the net profit grew 11.4% on year compared to 8.9% in the preceding quarter. As many as 46 companies reported exceptional items this time. Analysts expected 186 of these 200 companies to report a profit growth of 1% on year.

 

Sequentially, the net profit, excluding one-time items, for the said quarter grew at the quickest pace since the March quarter of FY23. The profit margin of Nifty 200 companies for the March quarter was 12.93%. Adjusted for one-time items, the profit margin was 12.92%, the highest since at least the June quarter of FY21, signalling better cost management and revenue generation by companies.

 

While the numbers may signal recovery, an on-ground reading suggests otherwise. "Underlying demand remains weak, with rural seeing gradual improvement but urban demand staying subdued," Kotak Institutional Equities said in a note on Monday. "The weakness seen in the March quarter was broad-based. Even profit growth of high-end segments such as hotels, PVs (passenger vehicles), and jewellery is now slowing," said Nuvama Institutional Equities in a note on Tuesday.

 

Within Nifty 200, Nifty Next 50 companies reported the strongest year-on-year profit growth at 23.9%, which moderates to 22.5% on removal of one-time gains and losses. Nifty 50 companies' profit grew 9% on year in the March quarter, against expectations of a 5?cline by an Informist poll. Excluding one-time items trims down their profit growth to 5.8%. Nifty 50 and Nifty Next 50 combined form Nifty 100, which reported a profit growth of 12.9% for the March quarter, which falls to a still-respectable 10.2% on exclusion of one-time gains and losses.

 

Nifty Midcap 100 index, comprising the bottom 100 companies of Nifty 200, reported a profit growth of 27.6% for the March quarter. Eliminating one-time items shaves off around 8% from the growth, bringing it down markedly to 19.2% on year.

 

Analysts say the latest quarter has strengthened the structural case for midcap companies. "Notably, the mid-cap segment emerged as a surprising standout, highlighting its key role in producing future growth leaders and expanding the market's investable universe," Motilal Oswal Financial Services said in a note on Monday.

 

The revenue of Nifty 200 companies for the March quarter grew 5.9% on year, higher than Informist's poll of 5.2%. These companies have reported a single-digit revenue growth for the last eight quarters – a trend also seen in the aggregated on-year revenue growth of Nifty 50 and Nifty 100 companies. The revenue of companies grew in double digits between the March quarter of FY22 and March quarter of FY24, expanding as high as 58% on year at one point, likely driven by post-COVID boom.

 

The total income of these 200 companies increased 5.1% on year during the quarter under review. Other income, which forms roughly 4% of the total income, fell 3.5% on year. Other income contracted for the first time in the March quarter since the June quarter of FY23.

 

While the other incomes of Nifty 50 and Nifty Midcap 100 companies grew 3.5% and 11.4% on year, respectively, those of Nifty Next 50 and Nifty 100 companies fell 25.2% and 6.3% on year, respectively.

 

SECTORAL WINNERS AND LOSERS

It was a mixed bag for sectors, as profits of metals, telecommunication, chemicals, and cement companies accelerated while those of public sector banks and industrials decelerated, Nuvama said. During the March quarter, financial industry's credit growth stayed soft as consumption remained subdued, Kotak Equities said.

 

Automobile volumes remained weak and most large automobile companies reported weak margins in the recently concluded quarter. Barring the transport sector whose bottom line fell 15.7% on year, all other sectors that are part of the Nifty 200 reported a profit growth for the March quarter.

 

Exclusion of one-time items completely erases the 165% profit growth registered by 17 consumer companies. "The demand remained subdued during the quarter. Volume growth across most (consumer) companies was limited to low-to-mid-single digits," Motilal Oswal said.

 

Adjusted for one-time gains and losses, the aggregate net profit growth of 11 services companies, 18 technology, media, and telecommunications companies, and 37 basic industry companies grew 42.1%, 27.1%, and 14.7%, respectively, in the March quarter.

 

The bottom lines of 22 pharmaceutical and chemical firms, and 49 financial services companies grew 12.3% and 9%, respectively. The profit growth of 1.5% of energy companies, excluding one-time gains and losses, was the weakest among all sectors after transport firms. Their revenue growth of 2% was the lowest among all.

 

The on-year revenue growth of services companies was the highest at 21.8% for the March quarter, followed by consumer, pharmaceuticals and chemicals at 18.1% and 12.4%, respectively. The top line of technology, media, and telecommunications companies grew 9.7%, while transport, basic industries, and financial services registered a revenue increase of 7.6%, 6.8%, and 4.6%, respectively.

 

Cement companies fared well during the quarter under review but IT services companies' revenues remained weak amid increasing business uncertainties, Kotak Equities said. Pharmaceutical companies reported strong domestic sales growth in the quarter, while real estate companies' sales volumes fell on year even as sales increased in value terms, Kotak Equities added.

 

EXPENSES

The aggregate expenses of Nifty 200 companies and those part of the sub-indices grew at a slower pace than their top line. However, the total expenses of Nifty 200 companies grew at 4.5%, a two-quarter high. Sequentially, total expenses grew 6.6%, the fastest since the March quarter of FY22.

 

Among other major expenditure heads, finance costs of Nifty 200 companies grew at the fastest clip year-on-year but barely increased sequentially, similar to Nifty 50, Nifty 100, and Nifty Next 50 companies. Finance costs of 193 of 200 companies increased 11.4% on year in the March quarter, but only 1.5% sequentially.

 

Yet, this was the weakest on-year growth in finance costs since the June quarter of FY23. Excluding financials and oil marketing companies, Nifty 200 companies' profit before interest and tax surged 10.2% on year, YES Securities said in a report on Monday. Higher profit before interest and tax, coupled with slow rise in the interest cost led to a 20 basis point-improvement in their interest coverage ratios. These companies can cover their interest payments 6.1 times over with their earnings, the highest level since at least the March quarter of FY23, the report said.

 

Input costs usually form the biggest chunk of a company's total expenses. The aggregate cost of materials consumed by 112 of Nifty 200 companies grew 8.1% on year and 9.4% on quarter for the period under review. Sequentially, this expenditure grew at the fastest rate since the June quarter of FY23. Of the 200 companies, as many as 17 consumer sector players reported a 35% increase in input costs. Cost of materials consumed forms 66% of the total expenses of these 17 companies, which grew 20% on year.

 

Other expenses, which constitute 17% of Nifty 200 companies' total expenses, grew 8.7% on year in the March quarter, a three-quarter high. Other expenses of Nifty Midcap 100 companies increased at a rapid 15.8% on year, a one-year high.

 

The earnings before interest, taxes, depreciation, and amortisation of Nifty 200 companies, excluding financials and oil marketing companies, grew 9.7% on year and 6.1% sequentially, YES Securities said. The broking firm had expected EBITDA margin of these companies to contract 60 bps for the reporting quarter, but they fell only 30 bps on year.

 

The following is a snapshot of the companies in the Nifty 50, the Nifty next 50, the Nifty 100, the Nifty Midcap 100, and the Nifty 200 for the March quarter, along with year-on-year and sequential changes juxtaposed with the consensus estimates from the Informist Poll of 29 brokerages:

INDICES	Revenue	Other Income	Total Income	Total Expenses	Material Cost	Employee Expenses	Depreciation	Finance Costs	Other Expenses	PAT	Adj. PAT
NIFTY 50	POLL: 5.00%									POLL: -5%	POLL: -5%
YoY	6.30%	3.52%	5.32%	5.07%	6.59%	5.49%	7.33%	10.63%	7.75%	8.96%	5.78%
QoQ	5.52%	29.70%	6.35%	6.90%	9.55%	3.73%	3.72%	1.34%	10.26%	11.19%	16.15%
NIFTY NEXT 50	POLL: 5.00%									POLL: 5.07%	POLL: 5.07%
YoY	4.69%	-25.18%	3.57%	2.56%	9.89%	-8.32%	10.01%	11.41%	4.69%	23.94%	22.54%
QoQ	10.78%	9.56%	9.58%	5.70%	10.60%	2.96%	8.06%	1.43%	0.10%	20.62%	25.52%
NIFTY 100	POLL: 4.94%									POLL:-3.78%	POLL:-3.78%
YoY	5.77%	-6.28%	4.71%	4.32%	7.57%	2.18%	7.92%	10.90%	7.10%	12.94%	10.23%
QoQ	7.18%	23.51%	7.44%	6.54%	9.86%	3.57%	4.67%	1.37%	7.99%	13.78%	18.77%
NIFTY MIDCAP 100	POLL: 5.49%									POLL: 9.86%	POLL: 9.86%
YoY	6.19%	11.42%	7.11%	4.95%	9.76%	6.24%	3.70%	13.67%	15.83%	27.62%	19.23%
QoQ	5.47%	26.87%	5.81%	6.64%	7.75%	4.38%	3.21%	1.75%	14.94%	-4.79%	3.35%
NIFTY 200	POLL: 5.2%									POLL: 0.78%	POLL: 0.78%
YoY	5.85%	-3.45%	5.14%	4.45%	8.06%	2.80%	7.04%	11.44%	8.71%	14.76%	11.37%
QoQ	6.85%	24.12%	7.14%	6.56%	9.38%	3.69%	4.37%	1.45%	9.28%	10.80%	16.41%

 

The following table shows the net profit margin of companies in the various indices as well as their net profit margin excluding exceptional items:

Profit Margin	Mar-25	Mar-25(Adj)	Dec-24	Dec-24(Adj)	Mar-24	Mar-24 (Adj)
Nifty 50	14.45%	14.40%	13.71%	13.08%	14.10%	14.47%
Nifty 100	13.74%	13.76%	12.94%	12.42%	12.86%	13.21%
Nifty Next 50	12.26%	12.45%	11.26%	10.99%	10.36%	10.64%
Nifty 200	12.93%	12.92%	12.47%	11.86%	11.93%	12.28%
Nifty Midcap 100	9.46%	9.31%	10.48%	9.50%	7.87%	8.29%

(Note: Analyst estimates for each index group are derived from estimates for companies that are part of the respective indices)

 

End

 

Edited by Ashish Shirke

 

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