Rising input costs and crude prices impacted India Inc's profitability

However, the operating margins got impacted by 2.20 per cent compared to a year ago period and 0.70 per cent when compared to the preceding quarter, its vice-president for corporate sector ratings Shamsher Dewan said.

Rising input costs and crude prices have impacted India Inc's profitability in the September quarter despite good revenue growth, as operating margins declined by 2.20 per cent, says a report. The corporate sector has reported a revenue growth of 23.9 per cent for the September quarter over the same period last year, domestic rating agency Icra said Monday, based on its analysis of 176 companies.

However, the operating margins got impacted by 2.20 per cent compared to a year ago period and 0.70 per cent when compared to the preceding quarter, its vice-president for corporate sector ratings Shamsher Dewan said.

This was largely on a rise in energy and raw material costs as well as the adverse impact of the Rupee's nearly 15 per cent depreciation during the year, he explained. Dewan said 21 of the 32 sectors analysed by the agency saw a decline in operating profit margins, adding airlines, cement and building materials were impacted by the sharp increase in fuel prices, while auto, consumer durables, paints and print media were hurt by rising input costs.

From a revenue growth perspective, commodity-linked sectors like iron and steel, oil and gas, and cement witnessed an increase in revenues, it said. The commodity-linked sectors posted a 61 per cent revenue growth as compared to last year, supported by higher oil and steel prices, and healthy demand for cement, it said.

If one were to exclude the commodity-linked sectors, the rest of companies recorded a revenue growth of 13.7 per cent, which is higher than the previous quarters.