Strong performance by IT companies and RIL boost India Inc’s Q2 numbers

<p>The picture looks bleaker as India Inc reaches the middle of the current (June-September) results season. A sample of 236 companies excluding banks and finance companies reported a robust 26.7 per cent year-on-year growth in net sales for the September 2018 quarter. Despite this, the performance does not instil confidence since it is largely driven by a strong show from the information technology (IT) sector and upbeat numbers from Reliance Industries (RIL NSE 2.07 %), the country&rsquo;s petroleum refining giant which also runs a rapidly growing telecom venture.&nbsp;</p> <p>In addition, notwithstanding their double-digit bottom line growth, the sample&rsquo;s net profit grew just 3.5 per cent, reflecting weakness in the broader profitability.&nbsp;</p> <p>The 27 IT companies and RIL together contributed 54.1 per cent to the sample&rsquo;s revenue, the highest in 13 quarters. They also formed 59.8 per cent of the aggregate net profit, the highest in 11 quarters. Without their contribution, the sample&rsquo;s net profit would have fallen by 12.2 per cent, a first in nine quarters, whereas net sales would have increased at a slower rate of 15.4 per cent.&nbsp;</p> <p>Other major sectors that reported double-digit sales and net profit growth were auto ancillary, capital goods, fast-moving consumer goods (FMCG), and pharmaceuticals. The aggregate growth is expected to moderate in the coming weeks with more companies adding to the sample.&nbsp;</p>