Take out Reliance Industries, Cairn India, Petronet LNG and Gujarat Gas Company and corporate results for the quarter ended March 2015 tell you a completely different story, than with them.
Oil and gas companies are the only reason why early bird results of 154 companies show an 8 per cent fall in revenue as against 13 per cent growth in the same quarter of the previous financial year.
The sector has been hit by over 50 per cent fall in global crude oil prices in the last 11 months. Oil companies bore the brunt of this in the form of lower toplines.
Their performance would make you believe that the much-awaited recovery from the prolonged slowdown was a distant dream. Hold on!
Far from that, excluding the oil and gas majors, companies reported a healthy 12 per cent rise in revenue. Even the rise in profit before depreciation, interest and tax, which appears depressed at just over 8 per cent, is a far healthier 13 per cent without the oil companies.
For the entire fiscal 2014/15, too, an analysis of 226 companies whose results have been declared shows close to 13 per cent growth in topline (excluding oil and gas companies). This goes down to 2 per cent if we include the oil companies. Net profit growth for the lot, excluding the oil companies, stood at a healthy 23 per cent. But this falls to 14 per cent when oil companies' results are included.
That's a good reason for the industry to believe that the uptick in the economy is for real. "The upturn started in the October-December quarter of 2014. For us, January-March 2015 has been 10 per cent above target. The demand pick-up is sporadic, is sequentially positive, but slightly behind our expectation," says Parag Satpute, MD, Sandvik Asia, the Indian arm of the Swedish construction and mining equipment major.
The services sector has a similar trend to report. "We grew 15.5 per cent in the quarter ended March (as against 8 per cent in the same quarter last year). This is the highest growth in the past eight quarters. There is also a buoyancy in the job market," says Rohit Kapoor, Vice Chairman and CEO, EXL Service, a BPO firm.
True, India Inc is far from the healthy 20 per cent plus topline growth that was the norm a few years ago. But a lot of this has to do with the debt pile-up that is chipping away at margins through interest payout even as revenues have either stagnated or risen marginally over the past few years.
Despite the slowdown, debt of these companies continued to grow and rose 12 to 13 per cent year-on-year on account of ongoing projects and capacity expansion, or debottlenecking. Yet, it was the oil and gas sector that pulled down the results of the sample. The four oil majors which have declared their results so far have reported a 39 per cent decline in total income and 27 per cent in profit in the quarter ended March 2015.
Among other sectors, telecom did well. Three telecom companies - Bharti Airtel, Idea Cellular and Bharti Infratel - posted a 23 per cent increase in topline and a whopping 90 per cent rise in bottomline, thanks to growth in revenue from data services.
The next best performer is the BFSI (banking, financial services and insurance) sector, which posted 17 per cent growth in income and 19 per cent in net profit. Twenty BFSI companies have declared results till date. These include HDFC bank, ICICI Bank, YES Bank and L&T Housing Finance.
The five drug makers posted a 7 per cent rise in income and 73 per cent rise in net profit, though the major industry players are yet to declare results.
In the IT and ITES space, 21 companies have declared results, including Infosys, TCS, Wipro and HCL. The lot posted 9 per cent growth in income but a 9.5 per cent fall in net profit. One reason is the 25 per cent decline in bottomline of TCS due to one-time special employee reward worth Rs 2,628 crore in this quarter.
Some big automobile and auto ancillary companies are yet to declare results. The sector has seen an 8.9 per cent increase in revenue and 68 per cent in net profit driven by Maruti Suzuki, which posted over 60 per cent rise in net profit. In the ancillary space, MRF Ltd posted 94 per cent growth in net profit.
These trends will cheer corporate India. However, as the bulk of companies declare their results in the coming weeks, the early trends may get subdued. The question is, how subdued will they be from the early bird results this time?