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Excluding financials, cumulative Nifty earnings posted a muted show in Q2FY23. At the Nifty level (ex-fiscal), growth was at 1.1% QoQ.
However, operating profit fell 123 basis points for the quarter to 14.6%, down 6.7% QoQ amid pressure on margins. Gross margin decline was limited to 19 bps QoQ, while staff costs and other expenses increased by 28 bps and 76 bps, respectively.
Profit after tax fell 6.7% in 2Q23, primarily driven by lower margins, but supported by higher other income and a lower effective tax rate (27.4% in 2Q23, 29.5% in 2Q23 ).
Based on 2017, the top line growth at the index level was 30%, -12%, respectively.
Corporate management comments were positive on the demand outlook (more on the domestic outlook) and the recent cool-down in core commodity prices gave hope for margin recovery in the second half of FY23.
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