Companies' profits hit all-time high in September quarter

Reduced costs and increased capacity utilization led to an increase in margins

Corporate profits rose 15% in the September quarter to an all-time high as margins soared due to lower raw material prices and increased capacity utilization.

Interest. Earnings before tax, depreciation, and amortization (EBDITA) reached an all-time high of Rs 1.60 lakh crore in the September quarter, compared to Rs 1.02 lakh crore in the June quarter, a rating agency said in a report.

On the one hand, the country's economic growth rate is turning negative, while on the other hand, the sharp rise in corporate revenue is a matter of concern as it provides an additional example of inequality, said one expert.

The analysis was conducted by a rating agency of 800 listed companies, excluding banking and finance and oil and gas companies, which account for 85% of the NSE's total market cap. The report noted a sharp rise in profits due to increased capacity utilization by large companies, better management of electricity, fuel, and raw material costs.

The September quarter saw the company's average operating margins increase by more than 1%. Employee back costs have also seen a decline. Although revenue has not increased, profits have increased. The June quarter saw a 29% drop in revenue while the September quarter saw a stabilization.

Smaller companies have had to bear the brunt of the decline in revenue compared to larger companies.