look news india
New Delhi: Rising commodity prices and increased costs of many commodities, including rising employee costs, have eroded operating margins for companies, while revenue growth has slowed.
For the group of 424 companies (except banks, financials and oil marketing companies) that announced Q2FY25 results, revenues grew by a modest 6% year-on-year. At the same time, total costs increased by 7% leading to a decline of approximately 80 basis points in operating margins. Furthermore, net profit grew only 4% due to an 11% increase in interest expense.
At Havells, employee costs increased by 26% due to manpower and salary hike, while advertising spend increased by 53% ahead of the festive season. The company has also invested in new distribution and sales channels.
At Hindustan Unilever, adjusted gross margin declined by 125 basis points due to volatility in commodity prices. The prices of palm oil and tea have increased by 10% and 25%.
IndiGo's total expenses – aircraft fuel, fares, repairs and maintenance and airport charges – rose 22% in the September quarter, while revenue from operations rose 13.6%. At Colgate, gross margin declined by 23 basis points and operating margin by 206 basis points.