Indian corporates made a full comeback with $111 billion profits, but the same can’t be said for 2023
- The corporate sector in India has made a full comeback in the fiscal year 2022, a report by Bank of Baroda noted.
- The report analyzed the performance of 2,108 companies, both financial and non-financial entities to come to the conclusion.
- Bank of Baroda revealed that net sales of these corporations grew by ₹18 lakh crore and the net profit by ₹3 lakh crore in FY2022.
The report noted that the Russia and Ukraine war has raised new challenges for Indian corporates in the form of high inflation, leading to a higher interest-rate regime.
“The rupee is also under pressure which will constantly weigh on the RBI. Inflation will come in the way of consumption and investment revival can be slowed down if the situation does not reverse in the next couple of months. The Q1 performance will provide some clue on which industries are resilient to these conditions.”
The report analyzed the performance of 2,108 companies, both financial and non-financial entities to come to the conclusion.
How did India’s corporates perform in FY2022?
The Bank of Baroda report revealed that net sales of 2,108 corporates in India grew by ₹18 lakh crore ($232 billion) to ₹84 lakh crore or $1 trillion.
That, coupled with demand increase aided the growth. “Further post-lockdown, the third and fourth quarters did witness some pent up demand which helped certain sectors,” the report added.
|Net sales||₹68,48,069 crore||₹67,92,071 crore||₹66,64,845 crore||₹84,95,020 crore|
|Operating profit||₹14,03,187 crore||₹14,15,431 crore||₹15,96,204 crore||₹18,72,749 crore|
|Net profit||₹4,54,385 crore||₹2,85,946 crore||₹5,47,986 crore||₹8,62,399 crore|
“In general the low base effect of FY20 and FY21 has provided an upward thrust for virtually all industries. There has hence been an improvement in sales and profits across all segments. One way of separating the performers is to short-list those which have witnessed higher than sample average growth in both net sales and net profit,” Bank of Baroda noted.
|High||Automobiles, capital goods, diamonds and jewellery, diversified group of companies, industrial gasses, mining, iron and steel, non-ferrous metals, paper|
|Higher than average||Media, infrastructure, banking and alcohol have registered high growth in net profit while chemicals, crude oil, electricals, hospitality, plastics, retail, textiles and trading|
The performance is much better if BFSI are out of the picture
The corporate performance could have been better if the banking, financial services and insurance (BFSI) sectors were excluded. “This is because the base effect was sharper as the BFSI sector performed well in FY21 since it was relatively less affected by the lockdown,” Bank of Baroda said.
The net sales of these 1,789 corporates — excluding BFSI — grew by over 35% even though the amount stayed consistent at around ₹18 lakh crore too. The net profit of these non-finance corporates grew by 65%. In comparison, the net sales of 2108 corporations had grown by 27.5% and net profit by 57% in FY2022.
|Net sales||₹54,74,759 crore||₹52,42,534 crore||₹50,07,859 crore||₹67,75,317 crore|
|Operating profit||₹9,28,834 crore||₹8,72,354 crore||₹9,82,507 crore||₹12,25,788 crore|
|Net profit||₹4,00,832 crore||₹2,10,146 crore||₹3,79,406 crore||₹6,25,263 crore|
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