DNA Money Edit: What the Q4 numbers foretell

As India's auto market strives to wriggle out of the current demand recession, Tata Motors Ltd's 47% drop in quarterly profit has come as a rude shock. Apart from the slowdown in the domestic market, TML on Monday blamed its inability to sell Jaguar Land Rover (JLR) cars in China and other key markets. On the same day, the state-run Hindustan Petroleum Corporation (HPCL) posted a 70% jump in quarterly net profit, helped by inventory gain and rupee appreciation that offset a dip in refinery margins. This follows Indian Oil Corporation (IOC)'s 17% jump in the quarterly net profit on Friday.

Though some companies have reported excellent fourth quarter numbers, some big cracks have become visible in India Inc's overall performance. A consumption slowdown has clearly dampened sales at some of India's big consumer goods firms, primarily thanks to the demand recession and a slow offtake of goods in rural markets. India's largest FMCG firm Hindustan Unilever (HUL) reported a 7% volume growth for the fourth quarter, but this was its slowest growth in six quarters. HUL officials pointed out that the company, in fact, witnessed a drop in rural growth, along with some of its peers, Godrej Consumer Products and Dabur.

Analysts believe that rural distress has already begun biting consumer companies, revered as India's most defensive pack. A moderate rural demand, liquidity crisis in the market and the adverse impact of a delayed summer have definitely pulled down the growth drivers.