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Corporate earnings for April-June were robust despite the second wave of Covid-19 and a report by ICICI Direct Research showed that the topline growth during the quarter was led by pharmaceutical companies.

The report noted that the topline growth was also supported by the resilient IT sector on the back of increasing digital spends, and the resurgent metals space which witnessed firm product realisations.

"In Q1FY22, topline growth on a QoQ basis was led by the pharma space, primarily the domestic branded formulations segment," said the recent report.

The laggard this time was the automobile space amid 34 per cent QoQ decline in auto sales volume due to limited dealership activity and capital goods domain due to seasonality with Q4 being a seasonally heavy quarter.

In the quarter, in the IT space, Tier-I companies grew 5.2 per cent QoQ while Tier-II companies grew 8.2 per cent QoQ.

In addition, one of the key themes that was observed in Q1 results was that there was much higher visibility of revenues based on strong deal wins and hiring trends.

The acceleration in order book and deal pipeline continues to be strong amid increase in spending by enterprises on cloud migration and digital technologies.

The report noted that corporate earnings were resilient in April-June 2021 (Q1FY22) amid Covid resurgence pan-India. It was primarily driven by limited impact on economic activity wherein Corporate India largely operated unabated during the second Covid wave.

At the Nifty index level, excluding financials, net sales decline was limited to 7.5 per cent on a sequential basis (QoQ) with Covid impacted low base in Q1FY21 making YoY comparison rather redundant, it said.

On the operating profit front, the decline was limited to 6.7 per cent amid 15 bps expansion in EBITDA margins to 19.2 per cent.

At the PAT level, net earnings declined 14.5 per cent QoQ led by a double digit QoQ decline in other income. With state specific unlocking under way, the management commentary was optimistic and hopeful of a strong rebound in rest of the year (9MFY22E).