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IndiaEarnings of India’s top 500 firms growing faster than US peers’

Earnings of India’s top 500 firms growing faster than US peers’

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Agencies

Profits of 's top listed companies have been growing at a faster pace than those of their American peers, but when it comes to revenue growth, the order has reversed recently.

The combined net profit of the S&P 500 companies was up 14.1 per cent year-on-year (Y-o-Y) during the trailing 12 months (TTM) ended December 2023, as against 17.4 per cent profit growth logged by the BSE 500 companies in the same period.

This is the second consecutive year of faster profit growth for the BSE 500 companies.

The S&P 500 companies' combined net profit grew to $1,782.3 billion during the 12 months ended December 2023 from $1,561.5 billion a year ago, according to the Bloomberg data.

In the same period, the combined net profit of India's top companies that are part of the BSE 500 index grew to $142.4 billion from $121.3 billion a year ago, an increase of 17.4 per cent.

In contrast, the combined revenue of the S&P 500 companies grew 6.2 per cent Y-o-Y on a TTM basis, as against the 4.6 per cent revenue growth posted by the BSE 500 companies in US dollar terms in this period.

In the previous two years, the combined revenue of the BSE 500 firms had grown faster than their US peers, thus indicating a reversal in trend in CY2023.

The combined revenue of the S&P 500 companies grew to $16,813.4 billion during the 12 months ended December 2023 from $15,835 billion a year ago.

In the same period, the combined revenue of the BSE500 firms increased to $1,525.6 billion from $1,458.1 billion a year ago.

The analysis is based on quarterly revenues and profits of companies that are part of the S&P 500 and BSE 500 indices.

Indian companies' numbers have been converted into US dollars using the average rupee-dollar exchange rate in the respective quarter.

The last four quarters' numbers were added to get the trailing 12-month numbers.

The numbers, however, also suggest that a typical company in the 's biggest is more profitable compared to its peers in India.

The S&P 500 companies reported a net profit margin of 10.6 per cent (as a percentage of revenues) on average during the year ended December 2023 compared to the BSE 500 companies' average net profit margin of 9.3 per cent during the same period.

This is the fourth consecutive year, at least, when US companies have clocked higher profitability than India's top companies.

However, the margin expansion in India from a post-pandemic low has been faster than in the US.

The net profit margin for the BSE 500 companies has increased by 410 basis points from a low of 5.2 per cent during the trailing 12 months ended December 2020.

In the same period, the S&P 500 companies' net profit margin increased by 330 basis points from 7.3 per cent during the year ended December 2020.

Analysts attributed the faster revenue growth in the S&P 500 companies to stronger consumer demand in the US.

 

 

 

Northlines
Northlines
The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

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