Pharmaceutical Companies Lead Revenue Growth in First Quarter FY22: ICICI Direct Research

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Business profits for April-June were strong despite the second wave of Covid-19 and a report from ICICI Direct Research showed that revenue growth in the quarter was led by pharmaceutical companies.

The report noted that revenue growth has also been supported by the resilient IT industry through increased digital spending and the resurgence of the metals space which has seen strong product achievements.

“In the first quarter of fiscal 22, revenue growth on a QoQ basis was led by the pharmaceutical space, primarily the domestic brand formulations segment,” the recent report said.

The laggard this time was the automotive space amid a 34% drop in auto sales volume in QoQ due to limited dealer activity and the capital goods field due to seasonality. , the fourth quarter being a very seasonal quarter.

During the quarter, in the IT space, Level I companies grew 5.2% in QoQ while Level II companies grew 8.2% in QoQ.

Additionally, one of the key themes observed in the first quarter results was that there was much higher visibility of revenue based on strong sales and hiring trends.

The acceleration of the order book and transaction pipeline continues to be strong against a backdrop of increasing corporate spending on cloud migration and digital technologies.

The report noted that corporate earnings held up in April-June 2021 (T1FY22) amid the resurgence of pan-India Covid. It was mainly due to a limited impact on economic activity, with Corporate India having largely operated unabated during the second wave of Covid.

At the level of the Nifty index, excluding financial services, the decrease in net sales was limited to 7.5% on a sequential basis (QoQ) with a low base impacted by Covid in the first quarter of fiscal 21, making the Rather redundant year-on-year comparison, he said.

On the operating profit front, the decline was limited to 6.7 percent amid a 15 basis point expansion in EBITDA margins to 19.2 percent.

At the PAT level, net income was down 14.5% qoq, due to a double-digit qoq decline in other income. With state-specific release underway, management commentary was optimistic and hoped for a strong rebound for the remainder of the year (9MFY22E).

–IANS

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(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)

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