Early birds results: India Inc feels margin pressure

ACC’s operating margin contracted by about 600 bps y-o-y to 14.3 per cent despite an increase in blended realisations per tonne of 5 per cent y-o-y because operating costs per tonne jumped 13 per cent y-o-y and volumes were slightly lower. The company’s operating profit fell 25 per cent y-o-y.

Cement producers are raising prices and there has been a 5-6 per cent increase in April over March. However, analysts estimate it would take a total hike of 9-10 per cent for all the additional costs -incurred on diesel, coal and pet coke, to be passed on.

The tech pack put up a reasonably good performance. TCS stole the show with a record haul of orders at $11.3 billion and despite it being a seasonally weak quarter, Ebit margins came in at a strong 24.96 per cent, flat sequentially. Infosys missed estimates and is struggling with high attrition of 27 per cent; the Ebit margin came in at 21.5 per cent, a sharp compression of 200 bps quarter-on-quarter. HDFC Bank’s operating performance was lacklustre as operating profits were up just 5 per cent y-o-y on the back of a tepid rise in revenues; the better net profit growth of 23 per cent y-o-y was the result of a steep fall in provisions.

Producers of commodities are cashing in on the multi-year price highs. Revenues of Hindustan Zinc increased 27 per cent y-o-y driven up by higher zinc volumes.