The second quarter of FY 2025 has witnessed impressive results declared by prominent mid cap and large cap Indian companies. The recent key performers have been Axis Bank, Indian Railway Finance Corporation (IRFC), Tata Communications, HDFC Life, and others.
A Look at the Q2 Numbers
Axis Bank saw robust numbers with net profit increasing 10% year-on-year (YoY) at ₹1,777 crore, while revenue came under modest pressure, highlighting healthy core operations contributing to the growth. IRFC saw a net profit rise of 10.2% YoY at ₹1,777 crore, while revenue slowed down from the corresponding period last year. Tata Communications, on the other hand, suffered with net profit dipping 19.4% YoY to ₹183 crore, as it grappled with pricing pressures and higher operating expenses.
Mid cap companies experienced a mixed bag with HDFC Life experiencing investor confidence prior to its results with the anticipation of stable growth in premium and profit margins. Angel One and Tata Communications further underscored sectoral differences with their performance reflecting changing market dynamics.
Revenue and Profit Trends
Companies overall indicated mixed revenue and profit growth conveying sector-specific trends. Axis Bank Q2 revenue remained mostly unchanged year-on-year, indicating prudent credit growth but fee income stability. IRFC’s top line fell slightly on the back of shifts in leasing and lending patterns but remained profitable. That of Tata Communications also fell, affecting profitability margins. HDFC Life, meanwhile, is likely to achieve healthy premium inflows, with its top line benefitting. Growth in earnings continues to be moderate for mid caps due to macroeconomic woes but shows selective sectoral resilience.
Commentary by the Management
Management at these firms was optimistic but cautious. Axis Bank highlighted balanced credit expansion, improved risk management, and digital banking efforts to maintain profitability. IRFC pointed to diversification of financing and cost savings as the drivers for margin preservation. Tata Communications’ management pointed to competitive pricing and investment in network growth as short-term earnings pressures but are optimistic on long-term growth. HDFC Life’s management reaffirmed priority on customer acquisition and product innovation to take advantage of increasing insurance penetration.
Outlook Hereon
The Q2 results indicate a conservative but steady recovery path. Banking and financial services stood firm, but telecom and technology segments are suffering margin pressures in the face of competitive pricing and increased investments. Investors should be on the lookout for future results of other large caps like Reliance Industries and IT companies for overall market directions. Overall, the earnings season emphasises sector-specific trends and operational excellence to overcome macroeconomic headwinds.
