💰 Economy
India Inc posts its best revenue growth in nine quarters
In 60 seconds: Early results for July–September show Indian companies growing fast. Across 357 firms that have reported, revenue rose 22.1% year-on-year, the best in nine quarters, and net profit jumped 27.5%. Capital goods, metals, consumer durables, chemicals and auto parts led. Banks, IT and pharma lagged, and the operating margin slipped to 20.8%. A weak low base from last year also helped.
Why it matters
Company earnings drive share prices, jobs and tax collections. Strong numbers suggest demand in the economy is picking up.
Explain it simply
Imagine your chai stall sold 100 cups last October and 122 this October: that's 22% growth. If last October was a rainy, slow month, part of the jump is just a weak comparison. That's the 'low base' effect in today's numbers.
The 3-minute read
What happened
Results from 357 companies for the September 2026 quarter (Q2 of FY27) show revenue up 22.1% and net profit up 27.5% from a year earlier. In the June quarter, profit had grown only 9.7%. Excluding banks and finance companies, revenue grew 26.9% and profit 33.9%.
Background
A year earlier, in July–September 2025, the same group grew revenue by only 6.7% and profit by 12.4%. When last year's figure is small, even a normal recovery shows up as a big percentage jump.
How it works
Not every sector shared the gains. Capital goods, metals, consumer durables, chemicals and auto ancillaries did well. Banks and finance companies saw weak net interest margins, which pulled the overall operating margin down 150 basis points to 20.8%. IT firms' share of total revenue fell to 15.5% from 16.8% as clients delayed projects.
What's next
More companies will report results in the coming weeks, so the picture can change. Watch whether banks' margins recover and whether IT companies win new deals, especially in artificial intelligence.
What it means for you
If you invest through mutual funds or own shares, strong earnings usually support prices. If you work in capital goods, metals or manufacturing, it signals busier order books; in IT, a slower phase.
Key numbers
- 22.1%: Revenue growth, year-on-year
- 27.5%: Net profit growth
- 357: Companies in the sample
- 20.8%: Operating margin (down 150 bps)
Both sides
- Manufacturing companies: Strong orders for machines, metals and durables show demand is broad-based.
- Cautious analysts: Part of the jump is the weak base of last year; banks and IT still need to recover.
Key terms explained
- Year-on-year
- Comparing a figure with the same period one year earlier.
- Operating margin
- The share of revenue left as profit after day-to-day running costs, before interest and tax.
- Low base
- When the comparison figure from last year was unusually small, making this year's growth look bigger.
The story so far
- Jul–Sep 2025: A weak quarter: revenue grew 6.7%, profit 12.4%. A year ago, the same group of companies grew revenue by just 6.7% and profit by 12.4%. That weak base is one reason this year's growth looks so strong.
- Apr–Jun 2026: Profit growth slowed to 9.7%. In the April–June 2026 quarter, net profit of listed companies grew 9.7% over the previous year, much slower than what followed in the next quarter.
- Today: Q2 revenue up 22.1%, profit up 27.5%
Exam notes (UPSC, SSC, Banking, PSC)
- India's financial year runs from April to March, so July–September 2026 is Q2 of FY2026-27 (FY27).
- Operating margin = operating profit ÷ revenue. It shows how much of each rupee of sales is left after running costs.
- One basis point (bp) is 0.01 percentage point, so 150 bps = 1.5 percentage points.
- Year-on-year (YoY) compares a period with the same period a year earlier, removing seasonal effects.
Likely exam question: What is meant by the 'base effect' in growth figures? Explain with an example.