India Inc finds a silent saviour during demand slump

The total income of 182 companies, which announced the first quarter results so far, showed a marginal improvement with an annual increase of 5.4% Mint Analysis was shown. However, net profits have brought 23% closer, because raw material costs fell by 14% throughout the year, the most steep decline in the eight quarter.

Raw material costs were 15% lower than the March quarter;

This shows that Indian manufacturers benefit from input cost deflation. India’s wholesale price inflation index increased by 0.4% in April-June and 2.4% in the previous quarter.

Senior Research Analyst Simranjeet Singh Bhatia, a mediator company Almondz Global, said that good -tempered crude oil and metal prices reduce production costs for companies due to the slowing of global demand and the fears of US -led tariff concerns. “The pouring of cheap chemicals from China was also a key factor.”

For non -financial companies, cheaper raw materials increased 26 MY FY26 FY 26 profit margins to 13.8%, which has not been seen since 4 MY21. In the analysis, there were 144 companies outside the banking, financial services and insurance sectors. A sharp contrast showed: Annual topline growth reached a lowest level of 0.85% in the first quarter, while net profit increased by 40% and pointed to the fastest growth in the 12 quarter.

The sequential difference is even more pronounced. Despite a 7% decrease in income, the profits decreased by raw material costs increased by more than 4.5%. Input costs, which are expressed as the percentage of net sales, reached a level of 40.6%in the quarter. This provided companies more financial flexibility in the first quarter and rose to the highest level of almost 18% of net sales to absorb higher employee expenses.

Although the costs working due to annual evaluations are typically higher in the first quarter, the increase in their share in total costs above the previous quarter (4 FY25) was the highest since 21 financial years.

These figures show that corporate wage growth tendencies can heal in June quarter.

It is still unclear whether the increase in institutional wages will be meaningful enough to provide a highly needed elephant for urban demand, but Manish Jain, President of the Fund Management in Centrum Broction, said that consumers would support the last measures to increase their disposable income.

“Recent policy measures such as income tax reductions, interest rate deductions and liquidity injections should lead to revival by the third quarter (FY26),” Jain said. He said. “However, based on the results of the first quarter, we expect two to three percentage points in earning estimates for 26 financial years.”

Experts now envisage approximately 10% earning growth for Nifty 50 companies in 26 financial years, as experts now affect one quarter of another quarter of another quarter throughout the year. In such a scenario, he said in a scenario, “benign raw material prices will continue in the rest of 2025 and continue to offer a tail wind to the profitability of India,” he said.

However, on the way to the dollar drop, the Madhusu expects commodity prices to rise from 2026 onwards. “Although the raw material tail winds did not last beyond 2025, India Inc’s net profit margin has not yet been fully performed.”

This means that the Indian industry still uses its capacity due to warm demand and is not encouraged to borrow, although its debt levels are historically low. According to Motilal Oswal financial services, Nifty 500 Universe’s corporate profit / GDP ratio reaches a 4.7% of 4.7% in 25 financial years, while experts believe that it has more space for the demand to grow after a significant increase.

The market expects middle valve companies to perform better than large and small cover peers in the first quarter in line with the FY25 tendency. However, Jain from Centrum Broken said, “For private banks, gains, IT and automobile companies should pull down the second quarter. Therefore, the big Cap Nifty 50 index should soon benefit.”

Analysts also expect the cement sector to perform better than others in the first quarter and the wider market will be consolidated at the current levels and continues with the gains announced so far.

Ionic Return Madhususudhan said, “Existing values are likely to continue for the time being,” Ionic said. “However, a US-Indian trade agreement, if it happens and in August (by the Indian Reserve Bank), a possible interest rate will certainly increase emotion.”