Q4FY24 report card: India Inc’s combined net profit in Q4 grew slowest in the last five quarters

The combined net profits of listed companies, adjusted for exceptional gains and losses, surged 11.4% year-on-year (YoY) in January-March 2024 (Q4FY24). The growth is at the slowest pace in the last five quarters.

The combined net profits of companies jumped to ₹3.56 lakh crore in Q4FY 24. This is up from the ₹3.2 lakh crore each in Q4FY23 and Q3FY24.

The incremental growth in earnings was pushed largely by banks, finance and insurance companies (BFSI), and the automobile sector. Also, companies in other major sectors such as oil and gas, information technology (IT) services, and fast-moving consumer goods (FMCG) experienced a slump in revenues and earnings.

However, the revenue growth of companies remains at a slow level despite a small surge in the fourth quarter. The combined net sales, comprising gross interest income in the case of banks and non-bank lenders, were up 7.2% Y-o-Y in Q4FY24. This was an improvement from the 6.4% in Q3FY24. The revenue growth registered was in single digits for the fourth consecutive quarter.

The companies registered combined net sales of ₹37.57 lakh crore in Q4FY24, up from ₹35.05 lakh crore in Q4FY24 and ₹35.44 lakh crore in Q3FY24.

Meanwhile, the gross domestic product (GDP) of India surged past all expectations and clocked 7.8% in the January-March quarter. The full-year 2023-24 GDP has been revised upwards to 8.2% from the second advance estimate of 7.6%.

This jump highlights an improvement from the 7.0% growth registered in the preceding fiscal year, showcasing the resilience and strength of the country’s economy amidst changing geopolitical dynamics.

Also, while India Inc recorded a good surge in profits for FY24, an increase of nearly 25%, the dividend payout ratio for companies that have announced results so far, at 34.83%, is the lowest in the last five years.