Mumbai, Feb 17 (IANS): Performance of companies during the quarter ended December of the financial year 2019-20 was weak with contraction in revenue and moderation in the growth rate of net profits, a report by Care Ratings said on Monday.

As per the report, the decline in profits, despite the cut in corporate tax, can be attributed to high growth in interest expenses and depreciation.

"For the quarter ended December, 2019, the performance of all companies has also been weak with contraction in top-line and moderation in net profit growth compared with corresponding quarter year ago. On excluding banks and finance companies, the performance is even weaker as both net sales and net profits have registered contraction," it said.

The number of industries which have recorded positive growth in net sales have almost halved in Q3 of FY 2019-20 compared to the same period last fiscal, said that report, adding that in terms of net profits, industries earning positive bottom-line have also seen a notable decline.

The corporate results analysed for a sample of around 2,200 companies showed a mixed picture for the nine-month ended December, 2019. Growth in net sales has been lacklustre indicative of overall slowdown across different industries while net profit growth has improved marginally on the back of companies resorting to the lower corporate tax rates, Care Ratings said.

Industries like refineries, auto ancillary, electronic components, oil exploration, steel and iron products and non-ferrous metals have recorded negative growth during the period under review while housing finance, shipping, sugar, non-banking finance companies, retail, and private banks have recorded notably double digit growths in during the third quarter of FY 2019-20.