Higher finance costs dent profits in Q2

Higher finance costs dent profits in Q2

The Economic Times

Operating margin of ETIG’s sample fell 530 basis points to 15% in the September quarter, the steepest fall in at least nine quarters. On a sequential basis, it contracted 200 basis points.

Synopsis

Companies found it difficult to fully pass on the impact of an effectively higher cost base to consumers amid intense competition to tap pent-up demand. While the December quarter may show a similar year-on-year trend, analysts expect the sequential trend to improve amid softening commodity prices.

ET Intelligence Group: India Inc’s absolute profits and profit margins were dented in the September quarter due to elevated financing expenses as companies borrowed more working capital at higher interest rates that had begun hardening early summer, while raw material input costs remained high for the period under review.

Companies found it difficult to fully pass on the impact of an effectively higher cost base to consumers amid intense

BY

ET Bureau

4 mins read, Last Updated:

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