In a twist for India’s blue-chip index, Nifty 50’s net earnings fell 8.1% in the holiday-shortened December quarter, snapping a 13-quarter winning streak despite 10% topline expansion. Labor law accounting adjustments stole the show.
Core revenues (sans banks, finance, O&G) notched double-digit growth unseen since Q1 FY24. EBITDA rose 7.5% annually, signaling operational resilience. For 37 constituents, however, PAT turned south—the first dip since Q2 FY23.
Blame lands on fresh labor codes from November, enforcing higher basic wages (50% CTC cap) and gratuity hikes. IT bellwethers TCS, Infosys, HCL fronted ₹4,373 crore one-offs, dragging tech profits down ~13%. Overall, after-tax profits shed ~5%.
Broader updates span payroll, safety protocols, and welfare benefits. Sequentially, sales momentum surged to 20% from 16%, boosted by GST easing.
Analysts frame this as a ‘one-and-done’ event, with underlying health intact. Investors may view it as a buying dip if growth sustains.
This episode illustrates regulatory ripple effects on markets, urging a nuanced read of earnings beyond surface metrics toward sustainable drivers.