Trump’s rhetoric on tariffs may have sent ripples across global markets amid geopolitical uncertainties, but the Q4 earnings season for India Inc. managed to generate its usual dose of surprises. The recurring narratives of business turnarounds–a delicate balance between “happy landings” and “unhappy landings”–took an ugly turn this time.
In a startling reversal of profits, the final quarter of fiscal year 2024-25 shows an alarming surge in companies plunging from profitability into losses. A Mint analysis of 184 BSE-listed companies shows that over 9% of the companies experienced a profit reversal, swinging from positive earnings in the preceding quarter to losses in the March quarter, marking the fiscal year’s most significant negative sequential earnings shift.
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A detailed analysis of standalone financial data sourced from Capitaline database reveals this negative trajectory contrasts sharply with previous quarters’ performance. Only 2.2% of companies reported earnings reversals in the December quarter, 1.6% in the September quarter, and 6% in the June quarter.
This sharp upswing in companies reporting negative profit reversals—from 6% in June to 9% in March—signals a worrying shift and suggests a troubling escalation beyond a temporary setback and a vulnerability that could worsen as macroeconomic headwinds and geopolitical tensions brew a perfect storm for corporate financials.
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Simultaneously, positive earnings transformations also occurred but were fewer and farther between, dropping to just 4.3% in the March quarter from 7.1% in the December period. However, June quarter showed less than 1% of companies witnessing a positive turnaround in their profits.
Among the ones that witnessed a positive turnaround, Kesoram Industries stood out, recording the sharpest profits in March quarter from net loss in the preceding quarter.
In absolute numbers, 17 companies slipped into losses compared to merely four in the December quarter, three in the September quarter, and 11 in the June quarter.
Among the hardest-hit companies, five companies – Tejas Networks, Motilal Oswal Financial Services, Network18 Media, Rallis India, and Nelco – reported substantial losses exceeding ₹10 crore in the March quarter. The financial losses from these companies represented 30% of the samples’ combined losses (reported by all these 17 companies with a negative profit turnaround).
Media conglomerate Network18 experienced a particularly dramatic financial deterioration, posting a substantial loss in March quarter after recording strong profits of about ₹3,432 crore in the preceding quarter. Similarly, Tata Group’s Tejas Networks saw its quarterly profits plummet from ₹165 crore to a ₹62 crore loss between the two quarters.
The market reaction has been swift and severe. Following its latest earnings announcement, Tejas Networks’ share price nosedived over 15% on Monday, underscoring investor concerns about this broader profit slump.
This is the second part of a series of data stories about the ongoing earnings season. Read the first part here.
