Mumbai, February 20 (IANS). According to industry data, Nifty 50’s earnings in the December quarter have seen an increase on an annual basis. However, this is the first time after 13 quarters that profits have declined.
Excluding banks, financial services and oil and gas companies, total income rose 10 percent in the quarter, double-digit growth for the first time since the March 2023 quarter, but overall profits declined due to the one-time accounting impact of India’s new labor laws.
Operating profit grew 7.5 per cent year-on-year, compared with 6.1 per cent in the September quarter and 5 per cent in the year-ago period.
According to industry data, despite the increase in earnings, the overall net profit of 37 Nifty 50 companies fell 8.1 per cent compared to the previous year, marking negative profit growth for the first time since the September 2022 quarter.
Analysts attributed the decline in profits to the one-time accounting impact of India’s new labor laws, which mandate increasing the basic salary to 50 percent of the total cost-to-the-company, as well as increased gratuity provisions.
He further said that due to changes in the labor code, the total profit after tax has declined by about 5 percent, while the technology sector is estimated to decline by 13 percent.
Meanwhile, earnings growth accelerated sequentially to 20 per cent from 16 per cent in Q3FY26, especially after the implementation of the Goods and Services Tax (GST) cut.
The new Labor Code was implemented in November and brought about changes in wages, workplace safety and social security.
According to multiple reports, TCS, Infosys and HCL together bore one-time charges of over Rs 4,373 crore related to the implementation of the new rules, leading to a double-digit decline in quarterly profits.
–IANS
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