As cost of borrowings go down, corporates post higher profits

The earnings season for the first quarter of 2016-17 ending June 2016 is on. For 700 odd companies which have declared their quarterly results so far, the picture looks bright. The bottom-line for these companies has gone up 11.6% from same quarter last year. While the top-line witnessed growth of 4.6%.

The earnings season for the first quarter of 2016-17 ending June 2016 is on. For 700 odd companies which have declared their quarterly results so far, the picture looks bright. The bottom-line for these companies has gone up 11.6% from same quarter last year. While the top-line witnessed growth of 4.6%.

As cost of borrowing is decreasing companies are showing a growth in their bottomlines in the April-June quarter of 2016-2017. (Livemint)

Lower interest cost and also falling raw material cost helped companies to boost performance. Profit margin of these companies also expanded marginally to 11.6% in quarter ending June 2016 from 10.3% same period last year. The Interest costs for the quarter inched up only by a marginal 5.6%, lowest in last eight quarters.

This is just the initial trend. A lot of companies are yet to announce their June quarter results. Complete trend will only be visible once all the companies have announced their results.