Latest news with #Capitaline
Mint
7 hours ago
- Business
- Mint
Corporate largesse hits record ₹5 trillion amid profit slowdown
In a bold display of corporate confidence, Indian companies have handsomely rewarded shareholders with a record ₹4.9 trillion in dividends in FY25, even as profit growth slowed. The generous payout underscores a strategic shift among firms to prioritize returns for investors over aggressive reinvestment, signalling both optimism and caution in a volatile economic climate. A Mint analysis of 496 BSE 500 companies, based on Capitaline data that uses both audited and unaudited numbers (including proposed dividends), shows that dividend payouts rose 11% year-on-year in FY25, outpacing net profit growth of 9.5%. This marks the first such divergence in three years. In contrast, profit jumped 29% in FY24 while dividends grew a modest 7.5%. In FY23 too, firms were less generous, when profit grew 11% but dividend payouts rose only 8.8%. The trend reversal in FY25 points to a strategic recalibration—corporates are choosing to reward shareholders more aggressively even as earnings momentum slows. Also read Companies ring the IPO doorbell, but the reception is cold "Rising dividends outpacing profits reveal corporate confidence in rewarding shareholders despite modest earnings growth," said Akshat Garg, assistant vice-president, Choice Wealth. 'While this signals stability to investors, it may also reflect caution—companies could be limiting reinvestment amid uncertain growth prospects." Meanwhile, beyond just dividends from profits, Hemant Nahata, executive vice president, strategy at Yes Securities, offers a comprehensive view on shareholder payback, factoring in operating cash flows. 'Shareholder returns should be viewed holistically, combining dividends and buybacks," he noted. 'When we evaluate shareholder payback, we focus on how companies deploy their operating cash flows—not just profits. In FY25, Indian corporates returned around 29% of their operating cash flows to shareholders through dividends and buybacks, a marginal rise from 28.8% in FY24 and slightly below 31–32% in FY23, reflecting a consistent payout trend," he highlighted further. While these generous giveaways reached record highs in the previous year, outpacing even the bottomline growth of the companies, it translated into a payout ratio of 35.2% (as a share of profit) in FY25. This ratio remains significantly below the decade's average of 42%, implying companies are distributing more but are also retaining a larger share of earnings compared to historical trends. 'This shows a shift in strategy. Companies are retaining slightly more profits, possibly due to fewer growth opportunities or macro uncertainty," said Pranay Aggarwal, chief executive officer of Stoxkart. Manufacturing firms, in particular, appear cautious. 'Many companies are taking a wait-and-watch approach on capital allocation amid geopolitical uncertainty. Past missteps like the 2022 downturn in chemical firms due to poorly timed capex highlight the risks of aggressive investment, especially in capital-intensive sectors," noted Sreeram Ramdas, vice president, Green Portfolio PMS. Further, since FY22, payout ratios have seen a decline, reflecting cautious optimism in capital allocation. 'The declining payout ratio shows that companies are adjusting dividend policies to align with more conservative cash flow assumptions," Aggarwal added. Also read Is India's premium at risk? As Israel-Iran conflict sparks FPI outflows, valuation debate rages Despite this, around 62% of companies in the sample have been unwaveringly sharing the bounties over the past five years. Among these, around 18% have been bestowing their shareholders with higher dividends each year since 2020-21. In FY25, around 55% of firms doled out higher dividends compared to the previous year while only 17% firms saw a decline. 'The recent rise in dividends is driven more by past profitability and reserves than by sustained earnings growth. If macro headwinds continue, payouts may moderate," said Asutosh Mishra, head, institutional equities, Ashika Stock Broking. Moreover, the top ten dividend payers accounted for roughly 40% of India Inc's total dividend payouts in FY25, distributing a staggering ₹1.9 trillion to investors. 'This reflects confidence from large-cap firms with stable cash flows," said Mishra. 'Some may be using dividends tactically in a high-liquidity environment. A company-specific lens is essential to avoid overinterpretation." Leading the pack was TCS with payouts of over ₹45,000 crore, exemplifying the IT sector's cash-rich dominance. Close behind were HDFC Bank and ITC with payouts nearing ₹17,000-18,000 crore, while Coal India, ONGC, and Vedanta each contributed between ₹15,000-16,000 crore, reflecting the breadth of dividend leadership across sectors. For investors looking at dividend plays, Garg from Choice Wealth stresses the importance of diversification and fundamental strength. 'While reliable dividend payers offer steady income, concentrated exposure increases risk. 'A balanced portfolio with fundamentally strong and consistent dividend-growers is key." This is the first part of a four-part series of data stories on the dividends declared by India Inc.
Mint
08-05-2025
- Business
- Mint
Q4 earnings watch: Demand slowdown puts FMCG's ‘fast-moving' promise to test
Tepid consumer demand continued to weigh on fast-moving consumer goods (FMCG) companies' revenue growth in the March quarter, extending a streak of sluggish topline expansion. Yet, behind this lacklustre revenue performance, cost control measures emerged as a crucial buffer, stabilizing profits and preventing deeper erosion. A Mint analysis of 19 FMCG firms shows that aggregate year-on-year revenue growth remained stagnant at 6.1% in Q4, marginally down from 6.6% in the preceding December quarter. In stark contrast, net profits surged dramatically from 12.1% year-on-year growth in Q3FY25 to an impressive 31% in Q4FY25, underscoring the widening divergence between these key performance metrics. This analysis was based on standalone data sourced from the Capitaline database for companies that have released their latest financial results so far. Revenue growth has remained muted for FMCG firms across all quarters of 2024-25, reflecting a persistent demand slowdown that continues to weigh on topline performance across the sector. Conversely, net profit has risen steadily over the same period, barring a dip in the September quarter of FY25. This divergence has pressured margins: net profit margins fell to 12.8% in Q4 from 13.7% in Q3, but improved compared to the year-ago period. Read this | Q4 earnings watch: Whispers of rural recovery as revenues buck broader trend Efforts to protect profitability are evident in a contraction in aggregate expenses in the second half of the fiscal year, reversing nearly 9% growth seen in the first half. However, some costs have started creeping up as input prices for essential commodities increased towards the end of 2024, despite overall inflation stabilizing. Raw material costs as a share of net sales rose to 28.5% in Q4, up from 27.3% in Q3 and 27.7% a year earlier. Most firms appear to have passed these higher costs onto consumers, with further price hikes expected to support revenue growth. A NielsenIQ report underscores this trend, showing 11% year-on-year value growth for the FMCG segment in the March quarter, driven by a 5.1% volume gain and a 5.6% price increase. Read this | FMCG's mixed bag: Rural strength masks slump in latest quarter Still, the company-wise analysis reveals a mixed performance. While seven of the 16 profitable firms saw net profits shrink in Q4, with five of them posting double-digit declines, robust growth in eight other firms helped offset these losses. Notably, companies such as VST Industries, GM Breweries, and Dabur India, which reported the steepest net profit declines, also saw revenue drop in the March quarter, suggesting a link between topline challenges and bottomline performance for certain players. Also read | The complicated relationship between consumer sentiment and stocks This is the tenth part of a series of data stories about the ongoing Q4 earnings season. Read previous parts of our earnings series here.
Mint
07-05-2025
- Business
- Mint
Q4 earnings watch: Whispers of rural recovery as revenues buck broader trend
Manjul Paul In the latest edition of Mint's Q4FY25 earnings series, we analyse how strong the rural tailwind is for companies focused on this sector. Companies largely catering to the rural segment have demonstrated an impressive show on the volume front. (Rajesh Kumar/Mint) Gift this article The emerging recovery in the rural hinterland, signalled by high-frequency indicators, is gaining further credence from the fourth quarter earnings. Companies largely catering to the rural segment have demonstrated an impressive show on the volume front, despite an overall revenue slowdown for India Inc. in the final quarter of fiscal year 2024-25. However, these firms struggle with a slowdown in profits, which is building pressure on their margins. The emerging recovery in the rural hinterland, signalled by high-frequency indicators, is gaining further credence from the fourth quarter earnings. Companies largely catering to the rural segment have demonstrated an impressive show on the volume front, despite an overall revenue slowdown for India Inc. in the final quarter of fiscal year 2024-25. However, these firms struggle with a slowdown in profits, which is building pressure on their margins. A latest Mint analysis of 32 companies within the Nifty Rural Index which tracks the performance of stocks from the Nifty 500, representing the rural theme, revealed that their aggregate revenue grew by 4% year-on-year during the fourth quarter of the just-concluded fiscal year. While this top-line growth appears modest in isolation, it actually follows a contraction in the previous quarter, offering glimpses of a rural resurgence. The analysis, based on standalone data from the Capitaline database, examined the latest quarterly financial performance of 492 listed companies that have released their results so far. Unlike their rural counterparts, a significant number of companies saw a steady deceleration in revenue growth across all four quarters of 2024-25. In the final quarter, these firms registered just 3% growth compared to the same period in the previous fiscal year, clearly indicating that the rural segment continues to demonstrate resilience against the backdrop of generally subdued demand. Sustaining demand Over the past three to four quarters, the rural economy has maintained considerable momentum despite a broader deceleration in urban areas. This strength emerging out of rural hinterlands has helped sustain overall demand. While rural businesses showed resilience in revenue growth, their bottom-line numbers depict some disappointment. Net profit growth for rural-themed companies slowed to 7% in the March quarter, down significantly from the robust 40% profit expansion recorded in the December quarter. Also read | Rural revival: Is it premature to celebrate? Meanwhile, the rest of Indian corporates – those outside the Nifty Rural Index – saw their profit growth improve from 6% in Q3 FY25 to 11% in Q4 FY25. Interestingly, further analysis of net profits as a share of revenue shows that margins for companies representing the Nifty Rural Index have declined in Q4, while margins have risen for the rest of India Inc. A detailed company-by-company analysis reveals that 12 out of the 32 Nifty Rural Index companies that have released their March quarter financial results experienced either declining or stagnant net profits compared to the same period last year. Poonawalla Fincorp, SBI card, and Supreme Industries recorded some of the most significant declines in net profits during the March quarter, contributing to the overall muted profit growth for Nifty Rural companies. This is the ninth part of a series of data stories about the ongoing Q4 earnings season. Read previous parts of our earnings series here. Topics You May Be Interested In
Mint
07-05-2025
- Business
- Mint
Q4 earnings watch: Whispers of rural recovery after a sluggish quarter
The emerging recovery in the rural hinterland, signalled by high-frequency indicators, is gaining further credence from the fourth quarter earnings. Companies largely catering to the rural segment have demonstrated an impressive show on the volume front, despite an overall revenue slowdown for India Inc. in the final quarter of fiscal year 2024-25. However, these firms struggle with a slowdown in profits, which is building pressure on their margins. A latest Mint analysis of 32 companies within the Nifty Rural Index which tracks the performance of stocks from the Nifty 500, representing the rural theme, revealed that their aggregate revenue grew by 4% year-on-year during the fourth quarter of the just-concluded fiscal year. While this top-line growth appears modest in isolation, it actually follows a contraction in the previous quarter, offering glimpses of a rural resurgence. The analysis, based on standalone data from the Capitaline database, examined the latest quarterly financial performance of 492 listed companies that have released their results so far. Unlike their rural counterparts, a significant number of companies saw a steady deceleration in revenue growth across all four quarters of 2024-25. In the final quarter, these firms registered just 3% growth compared to the same period in the previous fiscal year, clearly indicating that the rural segment continues to demonstrate resilience against the backdrop of generally subdued demand. Also Read: Rural India's reality check: Consumers turn cautious as aspiration meets inflation Over the past three to four quarters, the rural economy has maintained considerable momentum despite a broader deceleration in urban areas. This strength emerging out of rural hinterlands has helped sustain overall demand. While rural businesses showed resilience in revenue growth, their bottom line numbers depict some disappointment. Net profit growth for rural-themed companies slowed to 7% in the March quarter, down significantly from the robust 40% profit expansion recorded in the December quarter. Also read | Rural revival: Is it premature to celebrate? Meanwhile, the rest of Indian corporates – those outside the Nifty Rural Index – saw their profit growth improve from 6% in Q3 FY25 to 11% in Q4 FY25. Interestingly, further analysis of net profits as a share of revenue shows that margins for companies representing the Nifty Rural Index have declined in Q4, while margins have risen for the rest of India Inc. A detailed company-by-company analysis reveals that 12 out of the 32 Nifty Rural Index companies that have released their March quarter financial results experienced either declining or stagnant net profits compared to the same period last year. Poonawalla Fincorp , SBI card, and Supreme Industries recorded some of the most significant declines in net profits during the March quarter, contributing to the overall muted profit growth for Nifty Rural companies. On a more positive note, 17 other companies delivered robust double-digit profit growth in the March quarter. This growth was led by exceptional performers including Dalmia Bharat , Bandhan Bank , Tata Communications , and ICICI Prudential Life Insurance , all of which reported more than 100-fold increases in net profits compared to the same quarter in the previous fiscal year. This is the ninth part of a series of data stories about the ongoing Q4 earnings season. Read previous parts of our earnings series here.
Mint
02-05-2025
- Business
- Mint
Q4 earnings watch: Corporates shrug off headwinds to pocket more profit per rupee
Indian companies maintained robust profit growth last fiscal year, even as revenue expansion remained muted amid market volatility and geopolitical uncertainties over the past six months. Margin pressures eased consistently throughout fiscal year 2024-25 and both operating profits and net profits rose as a share of revenue gradually across all four quarters, showed a Mint analysis of 329 BSE-listed companies. The analysis, based on standalone numbers sourced from the Capitaline database of listed companies that have declared results for the quarter ended March, shows operating margins rose to 28.8% in the fourth quarter from 26% in the first quarter, while net profits climbed from 9.6% to 11.2% during the period. The improvement was achieved through cost controls, better pricing or operational efficiency despite muted volume growth. Also read: How India pays online: UPI leads with 65% share, EMIs make up 20%—in charts But only a few truly aced it completely. A detailed company-wise analysis of net profit margins showed that 26 of the 329, or only 8% companies, managed a consistent recovery in margin over the four quarters of 2024-25. For instance, Mukesh Ambani-led Reliance Industries Ltd was the only large-cap company that reported a consistent rise in net profit margins across all the four quarters. Pharma-focused Laurus Labs Ltd, engineering products firm Skipper Ltd and Himadri Speciality Chemical Ltd were among the other companies that saw their profitability improve. Conversely, about 21 companies recorded a consistent decline in the net profit margins during this period, signalling a persistent margin pressure among a few. Also read: India's GDP growth likely improved to 6.3% in December quarter: Mint poll However, the sectoral performance painted a more nuanced picture, even as aggregate margins showed recovery. While maintaining impressive double-digit profit margins, information technology (IT) services and construction and real estate sectors saw margins decline over a year earlier in Q4. Large deals provided top-line support for the IT services companies in Q4 but could continue to exert pressure on margins, analysts at JM Financials wrote in a recent report. Also read: FMCG's mixed bag: Rural strength masks slump in latest quarter The fast-moving consumer goods (FMCG) and automotive and ancillaries industries displayed some resilience amid a persistent subdued demand environment. Their net profit margins stayed stable or flat as some consumer staples companies balanced high commodity prices with cost controls. Among the sectors that performed well, metals and mining, travel and hospitality and pharma and healthcare reported a significant improvement, with margins rising by about 450-550 percentage points over the last fiscal. This is the fifth part of a series of data stories about the ongoing Q4 earnings season. Read the first , second , third and fourth part here.
