Corporate earnings slow to multi-quarter lows in Q1 as banking, consumer durables weigh
Indian companies experienced a slowdown in revenue and profit growth during the June quarter, hitting multi-year lows due to weak performance in banking, consumer durables, and capital goods sectors. While some sectors like cement and hospitality showed double-digit profit growth, overall operating margins contracted.
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Aggregate revenue and profit expansions touched multi-year lows in the June quarter on a muted performance across sectors such as banking, consumer durables and capital goods.In a sample of 3,197 companies analysed by ETIG, revenue climbed at a seven-quarter low of 6.4%, while net profit expansion of 7.7% was the weakest in at least nine quarters. The poor showing was, in part, offset by double-digit profit growth in cement, chemicals, construction, hospitality, and alcoholic beverages.Investors are eyeing a monsoon-led demand revival in the second half, undergirded by government expenditure, to recover from the June-quarter performance.Uncertainties related to US tariffs and geopolitics would also dictate the course - and extent - of any backloaded recovery in FY26. According to Vinit Bolinjkar, research head, Ventura Securities, price inflation and higher operating expenditure impacted profitability."This aligns with the broader market expectations as companies continue to face global macroeconomic challenges, including inflation, geopolitical tensions, and cautious consumer sentiment," said Bolinjkar.The studied sample's operating margin contracted 60 basis points year-on-year to 18.4% in the June quarter, largely influenced by the weakness in the net interest margin of banks.One basis point is a hundredth of a percentage point."In the banking sector, margins are likely to remain under pressure in the near term as the impact of rate cuts continues to trickle down," said Vinod Nair, research head, Geojit Investments.However, Nair expects a potential easing in credit costs to help stabilise margins in the second half of the fiscal year.Excluding banks and finance companies, the operating margin of the companies in the sample, at 15.6%, was flat year-on-year. In addition, net profit growth for the truncated sample improved to 10%, and revenue growth was a tad lower at 5.7% compared with the metrics for the full sample.Sectorally, the trend was mixed. Chethan Shenoy, research head, Anand Rathi Wealth , pointed out that industries such as non-banking financial companies (NBFC), infrastructure, and retail reported double-digit, year-on-year sales growth.On the other hand, metals and public sector banks showed a slump in sales while the IT sector's performance remained subdued amid circumspect global tech spending.For the remainder of FY26, Shenoy believes that opportunities lie in the infrastructure and capital expenditure cycle, a potential consumption recovery in retail and FMCG, and sustained margin tailwinds from lower commodity and logistics costs."However, risks remain from global growth slowdown, commodity price volatility, interest rate trends, and policy changes that could affect sensitive sectors such as energy and PSUs," Shenoy added.
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Ancient Indian kingdoms in the 6th century also had their own forms of currency that were the forerunners of the rupee. The Mahajanapadas of Gandhara, Kuntala, Kuru, Panchala, Shakya, Surasena, and Saurashtra all issued their own currency. STORY CONTINUES BELOW THIS AD While these were made of silver and had a set weight, they came in all shapes and sizes and with different. Coins from Saurashtra bore a humped bull, Dakshin Panchala stamped a Swastika, and Magadha went in for a variety of symbols. Chanakya, in his famed Arthashastra, mentions how the Mauryas under the great Emperor Chandragupta Maurya minted coins such as rupyarupa (silver) suvarnarupa (gold), tamararupa (copper) and sisarupa (lead). Chanakya, in his famed Arthashastra, mentions how the Mauryas under the great Emperor Chandragupta Maurya minted coins like rupyarupa (silver). Wikimedia Commons It was Sher Shah Suri, after defeating Mughal emperor Humayun, who standardised the rupiya. Suri, during his reign from 1540 to 1545, issued a silver coin weighing 11.5 grams. The name was kept out of respect for India's heritage. Though the British East India Company had already set up in India and even attempted to introduce the sterling pound, the rupiya's popularity remained unrivalled. Indeed the rupiya remained in circulation during the Mughal reigns, the era of the Marathas and in British India – a testament to Suri's organisational skills and the enduring power of the currency. By 1671, the British East India Company had given in. It began minting coins in the local style – using the rupiya. However, the value of the currency was not standard across India – which naturally created problems. In British India and more modern times It took till 1835 for the law to standardise the minting of the rupee. This came after the British colonial government passed the Paper Currency Act of 1861. Each rupee was split into 16 annas, which in turn were split into four pice (paise) each. So, one rupee equated to around 64 pice (paise). STORY CONTINUES BELOW THIS AD India continued to use silver and gold as currency till the 18th Century. However, the influx of European trading firms and the establishment of the banks resulted in the first paper currency being printed. The Bank of Hindostan (1770– 1832) in Calcutta, the General Bank of Bengal and Bihar (1773–75), and Bengal Bank (1784–91), all issued their own forms of paper currency. This is when the use of paper notes rather than coins began taking hold. The British colonial government forbade private banks from issuing their own currency. The Bank of England would take over responsibility for printing all of India's currency notes for the next hundred years or so. It introduced paper notes in the denominations of Rs 10, Rs 20, Rs 50, Rs 100, and Rs 1,000. This currency, known as the 'Victoria Portrait' series, depicted a small image of the British Queen on the top left. However, the denomination could only be used in certain areas known as 'currency circles' – Calcutta, Bombay, Madras, Rangoon, Kanpur, Lahore, and Karachi. These were unifaced, carried two language panels and were printed on hand-moulded paper. STORY CONTINUES BELOW THIS AD This currency, known as the 'Victoria Portrait' series, depicted a small image of the British Queen on the top left. Wikimedia Commons In 1867, the Victoria Portrait series was withdrawn due to forgeries and replaced by the Underprint series. From 1903 to 1911, Rs 5, Rs 10, Rs 50 and Rs 100 were universalised. The British government then introduced the 'King's Portrait' series – beginning with George V in 1923. It was only in 1928 that India set up its first currency printing press in Nasik. In 1935, the Reserve Bank of India was established, which finally took responsibility for handling India's money. The RBI continued in much the same vein as the Bank of England. Its first currency note, a denomination of Rs 5, was issued three years later in 1938. It bore a portrait of King George VI. The RBI also introduced denominations of Rs 10, Rs 100, Rs 1,000 and Rs 10,000. It also reintroduced the Rs 1 note, which had been first brought out in 1917 due to the first World War and discontinued in 1926. In March 1943, the Rs 2 note would follow. STORY CONTINUES BELOW THIS AD Post-Independence period After Independence, India found itself making a fresh start. However, it retained the currency and coins from the earlier period for a few years. At this time, 1 Rupee was 16 Annas, 1 Anna was 4 Pice and 1 Pice was 3 Pies. India kicked off its new series on August 15, 1950. There had been some arguments about Gandhiji's face replacing the King's. However, it was not to be. Instead, it was the Lion Capital of the Ashoka Pillar that replaced George VI. The tiger was replaced by the corn sheaf. However, the value of the coinage remained unchanged. It was only in 1957 that India adopted the decimal system. The rupee was now defined as 100 naya paise instead of 16 Annas. In 1964, Naya was dropped entirely. The Reserve Bank has now introduced a central bank digital currency (CBDC) – also known as an e-rupee It was only in 1969 that Gandhiji's face began being printed on currency notes of the denomination of Rs 2 and higher. Gandhiji would also feature on currency notes issued in 1996 of Rs 10 and Rs 500 – a replacement for the Lion Capital – and in 2005. New 50 paise, Rs 1, Rs 2 and Rs 5 stainless steel coins were also introduced. In 2010, the new symbol ₹ was introduced – a combination of the Latin letter R and the Devanagari letter र (ra). STORY CONTINUES BELOW THIS AD The Reserve Bank has now introduced a central bank digital currency (CBDC), also known as an e-rupee. It has also hinted that it is looking at cross-border pilot projects. It remains to be seen where the rupee will go in the age of cryptocurrency. With inputs from agencies
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