SynopsisIn the June quarter, Indian companies celebrated remarkable revenue growth, reaching a nine-quarter high. Despite this, profits grew by only eleven percent, largely due to rising input costs.

Key sectors such as auto, banking, metals, and pharma played a pivotal role in this expansion. Notably, small and midcap firms showcased impressive earnings per share.

Looking ahead, revenue is anticipated to gain momentum from upcoming festivals and premiumization strategies. 4% year-on-year revenue growth in the June quarter - the strongest in at least nine quarters - driven by strong performance in the auto, banking, metals, and pharma sectors.

While net profit also grew in double digits at 11%, rising input costs made it the slowest growth rate in a year. In the coming quarters, festivals and wedding season, and focus on product premiumisation are expected to sustain revenue momentum and support future profitability.

For a common sample of 3,589 companies, revenue net profit grew in double digits for the third and fourth consecutive quarter respectively. In addition, the momentum was stronger in the case of smallcap and midcap companies.

4% in that order," said Feroze Azeez, Joint CEO, Anand Rathi Wealth. Banking and finance companies continued to lend support to the sample's bottomline.

4% largely on account of a poor performance by the oil and gas sector due to higher fuel marketing losses and rising LPG under-recoveries amid volatile international energy prices. 9% for the June quarter.

ET BureauRead Also: Will Sensex, Nifty continue to bleed on Monday? 6% in the year-ago period, reflecting the impact of higher input cost inflation.

6% a year ago. The quarterly range for this ratio was 33-35% during the past three years.

The June quarter margins remained under pressure due to elevated input costs though the impact was partially cushioned by the utilisation of lower-cost inventory," said Vinod Nair, Head of Research, Geojit Investments. He expects this benefit to moderate in the September quarter as higher-cost inventory flows through the profit and loss account while monsoon-related disruptions may pose near-term challenges for select sectors.

" Nevertheless, premiumisation trends and seasonal demand from the festive and wedding periods are expected to provide support," Nair added. On the sector front, banking and finance, capital goods, healthcare, retail and jewellery companies reported strong performance while sectors such as automobiles, cement, consumer goods, and oil and gas reported pressure on profits and profitability.