Nifty 50 Companies Face Slower Profit Growth in June Quarter

The net profit growth of companies in India’s Nifty 50 index is expected to slow down in the April-June quarter, signaling a shift from previous robust performances. Analysts predict a modest 5% year-on-year increase in cumulative net profit, a sharp decline compared to the impressive 25% growth seen last fiscal year.

This slowdown reflects broader challenges across India Inc., with many companies anticipating single-digit growth in sales for the third consecutive quarter. Out of 47 companies analyzed, 13 are expected to see net profit soar by over 20%, while nine may face a decline in profits. Meanwhile, 18 companies are projected to achieve double-digit sales growth, contrasting with four that might experience a decline.

The growth story varies across sectors. Strong performers include the automobile and banking sectors, benefiting from robust economic growth. In contrast, sectors like cement, oil and gas, and chemicals are likely to underperform.

Banks, comprising a significant portion of the Nifty 50 index, are anticipated to report moderate profit and income growth, with private banks showing slower growth compared to previous quarters. Factors such as reduced loan growth and lower interest margins due to deposit adjustments are contributing to this trend.

Beyond banks, non-bank lenders and insurance companies are expected to show resilience, with strong revenue growth. Similarly, automobile companies are set to deliver impressive results, driven by higher product prices and strong sales in key segments.

Overall, while certain sectors continue to thrive, the broader economic landscape suggests a tempered growth trajectory for India’s top companies in the upcoming quarter.