Q1 Earnings Scorecard: Strong demand drives revenue, input costs hit profits
ET Intelligence Group: A double-digit increase in revenue but lower profitability due to input cost pressure were the key highlights of the June 2026 quarter
ET Intelligence Group: A double-digit increase in revenue but lower profitability due to input cost pressure were the key highlights of the June 2026 quarter across sectors. Consumer focussed sectors including automobiles and consumer goods reported strong top line growth led by sustained demand while sectors including cement, pharmaceuticals and downstream oil companies posted lower profitability.AutomobilesHits: Maruti Suzuki's market share increased by 230 basis points year-on-year to 41.2%, aided by a double digit increase in volumes of mall cars and SUVs amid GST rationalisation. Bajaj Auto reported record export volume of 7.3 lakh units, up 54% YoY.Misses: Higher input costs put pressure on sector's aggregate margin, which shrank by 210 basis points to 14.4%. Mahindra and Mahindra's operating margin before depreciation and amortization (Ebitda margin) contracted by 210 basis points to 12.2%.Outlook: Adverse commodity prices, rising competition and likely slack in rural demand in the case of a deficient monsoon are major risks for the sector in the short term. Companies with new product launches in the pipeline stand to gain volume share.Revenue change (YoY): 31.6%Net profit change (YoY): 5.9%BankingHits: Asset quality continued to improve. State bank of India reported its lowest gross nonperforming asset (GNPA) ratio of 1.5% in any of the quarters in over two decades and a record quarterly net profit of ₹21,121.2 crore.
The retail, agriculture and micro, small and medium enterprises (MSME) portfolio of banks continued to show double digit YoY growth.Misses: Profitability remained under pressure for most banks as net interest margins (NIM) either contracted or remained flat sequentially and year-on-year.Outlook: Credit growth is likely to moderate in the coming quarters on a higher base in the previous year and sustained geopolitical uncertainties. On the liabilities front, attracting deposits may remain competitive for most banks thereby limiting improvement in NIMs.Revenue change (YoY): 7.0%Net profit change (YoY):25.1%Read more: Indian equities could hit new highs next year: Aditya Birla MFCementHits: Cement prices firmed up 3% sequentially in the June quarter. Ultratech Cement delivered its strongest-ever first quarter in terms of volume, revenue, Ebitda and profit. Cement makers protected profitability through cost optimisation amid rising transportation and packaging costs.Misses: Barring Ultratech and Shree Cement, which reported double-digit revenue growth, other top companies including Ambuja Cements and ACC posted around 8% drop in their respective top lines amid lower volume.Outlook: The September quarter will likely show muted volume growth given slower construction activities due to rainy season. Given the continued input cost inflation, companies will be prompted to rely more on cost control to protect margins.Revenue change (YoY): 7.6%Net profit change (YoY): -5.3%CONSUMERHits: Volume recovery was a major theme in the June quarter with companies reporting growth across categories.
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