Page 21 - CII Artha Magazine

Domestic Trends

Corporate 70.0 Snapshot of the Overall Corporate Performance 12.0 To conclude, as companies also now started to

moderate. Moreover, not
have tried to pass on the
all companies have been
cost increase to consumers
by raising prices, the
successful in raising their
prices in line with the
demand of those products
60.0
10.0
9.1
Performance 50.0 37.9 50.9 28.9 8.0 has been impacted to some increased cost pressures,
extent. Therefore, while the
as they have preferred
40.0
to pass on the increase
price increase resulted in
5.6
6.0
30.0
revenue growth, the volume
in phases rather than at
4.0
growth has suffered. The
one go.
20.0
10.0
0.0 2.0 growth in price terms has
0.0
Q4FY21 Q1FY22 Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23
Net Sales (y-o-y%) PAT Margin (%) (rs)
Source: CMIE Prowess Database and CII Research
Note: includes analysis of 1986 non-financial listed companies (excluding banking and oil & gas)
T he volatility and Prowess database for the
second quarter (July-Sept
uncertainties in the
global environment since the 2022), the net sales growth
beginning of the current year moderated in both
have impacted all global sequential terms as well on last year. This contraction was
economies. The trigger for year-on-year terms in the NET PROFITS HAVE witnessed on the back of
the start of this shifting second quarter. It stood at CONTRACTED ON surging input costs. While part
sentiment can be pinpointed 28.9 per cent in 2QFY23 as RISING INPUT COSTS of increase in input costs was
to the Ukraine war. The war compared to 50.9 per cent transmitted to final price for
put an upward pressure on in the previous quarter and certain industries, in general
the commodity prices, thus 37.9 per cent in the same However, the net profits input costs seem to have risen
leading to input costs quarter last year. The contracted by 19.7 per cent in at a faster pace than the selling
increasing at its highest pace. aggressive monetary policy the second quarter, against the price, thereby depressing the
Adding to this was the chip tightening by the RBI double-digit growth of 44.5
shortages which resulted in coupled with global profits.
major supply bottlenecks. headwinds have impinged on per cent in the same quarter
the performance of the
These developments, which corporate sector.
were already having a bearing Net Profits (% y-o-y)
on India’s exports and overall
economy, have started to NET MARGIN 50.0 44.5
show an impact on the MODERATES 40.0
performance of the corporate 30.0
sector as well. SHARPLY IN 20.0
2QFY23 13.5 10.8
10.0
NET SALES 0.0 -1.3
GROWTH The PAT margins, on the -10.0
MODERATES ON other hand, though -20.0 -19.7
decelerated to 5.6 per cent
SEQUENTIAL & in Q2 FY23 from 9.1 per -30.0
ANNUAL BASIS cent in the same quarter last Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23
IN 2QFY23 year, have remained relatively
stable in tandem with the Source: CMIE Prowess Database and CII Research
cooling down of the global Note: includes analysis of 1986 non-financial listed companies (excluding banking and oil & gas)
As per CII Research analysis commodity prices coupled
of results of 2000 odd with cost reduction efforts
companies using CMIE’s by the companies.

20 ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY ANALYSIS, RESEARCH, THOUGHT LEADERSHIP & ADVOCACY 21
QUARTERLY JOURNAL OF ECONOMICS
QUARTERLY JOURNAL OF ECONOMICS
DECEMBER 2022 DECEMBER 2022