Over 75% of corporate India (by market cap) has declared Q3 results and the verdict is - We are on a roll!
Highlights of last 6 month performance (July-Dec) for 809 results (ex-financials) declared till Friday, Feb 5th.
1/n 👇
2/n
While revenue growth is close to pre-Covid levels (down 5%), there is a strong profitability growth lead by both gross margin expansion and operating leverage. No wonder everyone is talking EPS growth!
How do we compare with US on this front? Here.
FIIs: Note 👇
3/n
52.5% PAT growth overall and 43.9% ex financials!
How does this look across industries?
Ans: Broad based
4/n
Is this profitability growth due to one time cost savings?
Numbers reflect that is not the case. Most of the margin expansion is flowing from COGS (lower raw material/ cost of service) as against other opex!
Industry wise trend is healthy👇
5/n
Which names are driving the profitability growth?
Top contributors 👇
6/n
Companies directly impacted by Covid are gradually making a comeback but not yet back to normalized levels (highlighted in yellow).
7/n
This brings is the moot question - Has the declining corp profit to GDP trend bottomed out?
Enough indicators to say yes.
This, by no means, is a recommendation on valuation levels. But it re-enforces the view that Mr. Market has the best pulse of the economy and doesn't wait for reported numbers.
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