GST effect: India Inc profits dip by nearly 16%; net sales slow down to 8.7%

India Inc profits dipped by 15.7 per cent to Rs 87,475 crore in the first quarter of the current fiscal, largely owing to destocking of goods by companies before execution of GST regime from July 1, said a report today.

According to an analysis of 2,108 companies by credit rating agency Care Ratings, the corporate net profits stood at about Rs 1.04 lakh crore in April-June period of 2016-17.

Besides, net sales of companies slowed down to 8.7 per cent in the three months ended June 2017, after registering a growth of 9.5 per cent in the same period year-ago.

“During the first quarter of 2017-18, all companies faced the heat of the uncertainties revolving around the implementation of goods and services tax (GST) by the government as most companies were destocking goods before July 1 and operations were impacted quite markedly,” Care Ratings said.

As many as seven industries reported net loss, while 33 segments reported lower growth in net profit on year-on- year basis during the quarter ended June 2017.

The maximum drop was seen in consumer goods, automobiles and related segments, construction & real estate, finance, refineries, paper & paper products, pesticides & agrochemicals sectors.

Profitability of services sector like hospitality and retailing …read more