Earnings Season: Rising Commodity Prices Weigh on Indian Corporate Margins in Q3


Rising commodity prices weighed on Corporate India’s margins in Q3FY22, HDFC Securities said in a research report.

According to the report, the current earnings season is performing largely on expected lines with respect to revenue growth.

However, margins across the board fell primarily due to higher raw material prices.

Lately Covid has triggered supply issues as well as other global developments have driven up commodity prices.

Furthermore, he pointed out that the inability to fully pass on higher costs due to “not so robust demand”, especially on the rural side, added to the trend.

“Some results from large companies have yet to be released and whether the trend continues or reverses will be monitored.”

“The fourth quarter will also see some impact from the latest Omicron-related disruptions.”

Among sectors, PSU bank stocks performed well.

However, stocks in the refining, consumer durables and cement sectors performed below expectations.

“Among the sectors, textiles, sugar or ethanol, engineering, PSU banks, footwear, certain chemical stocks, steel, media and IT performed well.”

“The automotive, paints, life insurance, pharmaceuticals, refining, consumer durables and cement sectors disappointed.”

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear reader,

Business Standard has always endeavored to provide up-to-date information and commentary on developments that matter to you and that have wider political and economic implications for the country and the world. Your constant encouragement and feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these challenging times stemming from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative opinions and incisive commentary on relevant topical issues.
However, we have a request.

As we battle the economic impact of the pandemic, we need your support even more so that we can continue to bring you more great content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism we are committed to.

Support quality journalism and subscribe to Business Standard.

digital editor


Comments are closed.