Top 10 companies that turned profitable in Q1: Mukesh Ambani's Reliance and who else?

State Bank of India led the pack of the ten most profitable companies in the June quarter of financial year 2024. The asset quality was one of the primary reasons for the banks to perform well as it improved by leaps. HDFC Bank and ICICI Bank also made it to the list with their best quarterly profit on the back of improved Net Interest Margin (NIM), asset quality and Net Interest Income (NII).

Mukesh Ambani-led Reliance Industries, however, lost its position to state lender State Bank of India (SBI) as the most profitable company in the June quarter for the very first time in the past decade. 

There are over 5,000 companies listed on the Indian bourses. Of those companies, State Bank of India, Reliance Industries, Indian Oil Corporation Limited (IOCL), HDFC Bank, Tata Consultancy Services (TCS), ICICI Bank, Bharat Petroleum Corporation Limited (BPCL), Adani Power, Coal India, Hindustan Petroleum Corporation Limited (HPCL) emerged as the top 10 most profitable companies.

Here is a peek into the financial books of the 10 most profitable companies: 

State Bank of India 

The State lender reported a surge of 149 per cent in its June quarter consolidated net profit to Rs 18,736 crore to pip past Reliance Industries to emerge as the most profitable company in the first quarter of the financial year 2024. The bank had reported a profit of Rs 7,528 crore in the same quarter previous fiscal.

State lenders standalone profit rose 178 per cent to Rs 16,884 crore, from Rs 6,068 crore in the same quarter previous fiscal- the highest ever net profit for the fourth quarter in succession.

The net interest income (NII) soared nearly 25 per cent to Rs 38,904 crore against Rs 31,196 crore in the same quarter last year. However, NII plunged over 3.5 per cent sequentially. 

The asset quality, one of the primary reasons for the state lender to report stellar results, improved on the back of gross non-performing asset (NPA) of the bank falling to 2.76 per cent against 3.91 percent last year, and 2.78 per cent on a quarter-on -quarter basis. The net non-performing assets (NNPAs) dropped to 0.71 per cent against 1 per cent last year.

The credit cost for the quarter came in at 0.32 per cent, improved by 29 basis points year-on-year. Its’ gross NPA came in at Rs 91,327 crore as opposed to Rs 90,928 crore quarter-on-quarter (QoQ). The net NPA stood at Rs 22,995 crore against Rs 21,467 crore sequentially.

The Capital Adequacy Ratio (CAR) came in at 14.56 per cent, improved by 113 bps year-on-year.

Reliance Industries 

Even after losing the top spot of being the most profitable company after a decade to another company, Reliance Industries managed to report a decent June quarter performance. It reported a drop of 5.9 per cent on a YoY basis in its consolidate profit at Rs 18,258 crore. The drop came on the back of higher finance cost and increased depreciation.

Its gross revenue came in at Rs 2.31 lakh crore, down 4.7 per cent YoY, due to sharp decline in Oil to Chemicals (O2C) revenues with 31 per cent fall in crude oil prices. 

Reliance Industries’ earnings before interest, taxes, depreciation, and amortisation (EBITDA) surged 5.1 per cent YoY to Rs 41,982 crore. EBITDA growth was led by consumer and upstream businesses, which offset decline in O2C earnings. O2C earnings were lower due to a sharp fall in fuel cracks from exceptionally high levels in 1Q FY23.

Meanwhile, higher subscriber base and customer engagement led revenue and profitability growth for Digital Services. The company’s retail earnings reflected expanded footprint and improved profitability with operating leverage. Higher production and realisations contributed to growth in Oil & Gas EBITDA. 

The capital expenditure for the June quarter was Rs 39,645 crore. 

Indian Oil Corporation Limited (IOCL)

Indian Oil Corporation Limited (IOCL) reported a consolidated net profit of Rs 14,735 crore against Rs 883 crore in the same quarter last year, an increase of nearly 1,600 per cent on a YoY basis. The profit in Q1FY23 remained low due to higher international crude oil prices. The company’s profit surged 36 per cent sequentially as it reported a profit of Rs 10,841 crore in Q4 FY23.

However, revenue fell over 2.5 per cent to Rs 1.98 lakh crore against Rs 2.03 lakh crore on a quarter-on-quarter basis. Its EBITDA rose 34 per cent to Rs 23,716 crore against Rs 17,699 crore in the previous quarter (Q4FY23). Its margin rose 320 basis points to 11.9 per cent against 8.9 per cent in Q4FY23.

Indian Oil Corporation's debt to equity ratio improved to 0.70 against 0.86 YoY and 0.98 QoQ.

HDFC Bank 

World’s seventh largest lender HDFC Bank reported a consolidated net profit of Rs 12,370 crore in the June quarter, up over 29 per cent, from Rs 9,579 crore in the same quarter last year. Its Net Interest Income (NII) rose about 21 per cent to Rs 25,213 crore against Rs 20,915 crore in the same quarter previous fiscal. 

The private lenders asset quality improved on a year-on-year basis but performed poor sequentially. Its gross non-performing assets (GNPA) came in at 1.17 per cent against 1.12 per cent QoQ and 1.28 per cent YoY. While the net non-performing assets (NNPA) came in at 0.30 per cent against 0.27 per cent QoQ and 0.35 per cent YoY.

The total deposits grew 19.2 per cent on a YoY basis to Rs 19.1 lakh crore. CASA deposit rose 10.7 per cent on a year-on-year basis.

Tata Consultancy Services (TCS)

IT major TCS reported a consolidated profit of Rs 11,074 crore, a surge of nearly 17 per cent against Rs 9,478 crore in the same quarter last year. However, the profit fell on a QoQ basis by 2.8 per cent. Its revenue came in at Rs 59,381 crore, up 12.6 per cent YoY.

The company’s revenue in Constant Currency terms grew 7 per cent on a year-on-year basis. TCS order book stood at $10.2 billion while book to bill ratio was at 1.4. 

Industries growth was led by Life Sciences and Healthcare, which grew 10.1 per cent, and the manufacturing vertical surged 9.4 per cent. BFSI grew 3 per cent, technology and services grew 4.4 per cent while communications and media grew 0.5 per cent.

Among major markets, the United Kingdom led with 16.1 per cent growth; North America grew 4.6 per cent and Continental Europe grew 3.4 per cent. In emerging markets, Middle East & Africa grew 15.2 per cent, India rose 14 per cent, Latin America grew 13.5 per cent, and Asia Pacific surged 4.7 per cent.

In the services segment, clients continued to reprioritise, preferring business critical projects and those with a faster ROI. Cost optimisation, vendor consolidation and integrated operations remained high on priorities. Enhanced flexibility, resilience, and establishment of a solid foundation continued to drive transformation initiatives. Furthermore, growth in the segment was led by cloud modernisation, cyber security, IoT and digital engineering.

ICICI Bank 

India’s second largest private bank ICICI Bank’s profit after tax surged 39.7 per cent year-on-year to Rs 9,648 crore, against Rs 6,905 crore in the same quarter last year. 

Its total deposits grew 17.9 per cent year-on-year to Rs 12.39 lakh crore during the quarter. The average CASA ratio was 42.6 per cent during the same period.

The asset quality of the private lender improved by leaps and bounds as the gross NPA ratio dropped to 2.76 per cent in the June quarter, from 2.81% in the March quarter (Q4FY23). The net NPA ratio remained flat sequentially at 0.48 per cent. Recoveries and upgrades of NPAs, excluding write-offs and sale, were Rs 3,511 crore, compared to Rs 4,283 crore in Q4FY23. The Bank had written off gross NPAs amounting to Rs 1,169 crore in the June quarter.

The consolidated profit after tax increased 44 per cent year-on-year to Rs 10,636 crore, from Rs 7,385 crore in the same quarter last year. Additionally, the consolidated assets rose 17 per cent year-on-year to 20.4 lakh crore against Rs 17.4 lakh crore in the same quarter last year.

Bharat Petroleum Corporation Limited (BPCL)

The State-owned BPCL reported a consolidated net profit of Rs 10,551 crore in the June quarter after some recovery in fuel marketing margins. The refinery company, in the same quarter last year, had reported a loss of Rs 6,145 crore. 

However, BPCL’s revenue plummeted nearly 7 per cent to Rs 1.13 lakh crore against 1.21 lakh crore in the same quarter last year. Its EBITDA zoomed to Rs 15,785 crore against a loss of 5,824 crore in the same quarter last year. While the operating margin rose to 14 per cent in the June quarter.

The company made $12.64 *(convert to Rs)*on turning every barrel of crude oil into fuel during June quarter against a gross refining margin (GRM) of $27.51 per barrel in the same period last year. BPCL also accounted for a Rs 24.5 crore foreign exchange gain against a forex loss of Rs 962.5 crore in April-June 2022.

Adani Power 

Adani Power reported a surge of 83 percent year-on-year (YoY) in net profit at Rs 8,759 crore against Rs 4,780 crore in the same quarter last year.

The company’s revenue came in at Rs 11,006 crore, plunging 19.8 per cent, against Rs 13,723 crore in the same quarter last year. Its operating profit, also known as EBITDA, dropped 35 per cent to Rs 3,514 crore against Rs 5,412 crore in the same quarter previous fiscal. 

The EBITDA margin nosedived 700 basis points to 32 per cent against 39 per cent in Q1FY23.

During the June quarter, Adani Power Jharkhand Limited (APJL), a wholly owned subsidiary of Adani Power, commenced commercial operations of its Ultra-super-critical Power Plant of 1600 MW located at Godda, Jharkhand. Consequently, APJL began supplying power under its long term PPA with Bangladesh Power Development Board (BPDB), Bangladesh. 

Coal India 

State-run Coal India reported a profit of Rs 7,941 crore in the June quarter, down over 10 per cent, against Rs 8,834 crore in the same quarter last year. Its revenue, however, climbed 2.5 per cent to Rs 35,983 crore against Rs 35,092 crore in Q1FY23.

The company’s operating profit dropped 14.5 per cent to Rs 10,514 crore against Rs 12,251 crore in the same quarter previous fiscal. While its margin fell 580 basis points to 29.1 per cent against 34.9 per cent in Q1FY23.

Coal India’s expense grew nearly 12 per cent to Rs 26,786 crore against Rs 23,985 crore in the same quarter last year.

During the quarter, the company’s production of raw coal surged to 175.48 million tonnes, as opposed to 159.75 million tonnes in the same quarter previous fiscal.

Hindustan Petroleum Corporation Limited (HPCL)

Hindustan Petroleum Corporation Limited (HPCL) reported a profit of Rs 6,765 crore in the June quarter against a loss of Rs 8,557 crore in the same quarter last year. Its revenue fell a little over 2 per cent to Rs 1.12 lakh crore against 1.14 lakh crore in the same quarter previous fiscal.

HPCL EBITDA turned profitable on a year-on-year basis as it came in at Rs 9,645 crore against EBITDA loss of Rs 12,497 crore in the same quarter previous fiscal. Its margin came in at 8.6 per cent in the June quarter.

Average GRMs (Gross of export duty) for June quarter was $ 7.44 per barrel against$ 16.69 per barrel during the corresponding period of previous year. 

HPCL refineries processed the highest ever quarterly crude thru put of 5.40 million metric tonnes (MMT) during the June quarter, registering a growth of 12.3 per cent over 4.81 MMT crude processed during the corresponding period of previous year. 

Visakhapatnam Refinery functioned at enhanced capacity of 11 MMTPA as it processed the highest ever quarterly crude thru put of 2.96 MMT. 

On the marketing front, HPCL achieved its highest ever quarterly total sales volume (including exports) of 11.85 MMT against 10.70 MMT in the corresponding period of previous year, representing a growth of 10.7 per cent.