Indian firms are being squeezed by rising input costs and cooling demand, resulting in a slowdown in earnings and revenue growth compared to recent quarters.

An ETIG analysis of 600 companies that have announced results for the quarter ended March 31, 2012, shows that net profit, excluding firms in banking & financial services and oil & gas sectors, slid 2.5% from a year ago while revenue growth slipped to 14%, relatively slower than the previous quarters.

Net profit fell for the third consecutive quarter, though the decline was not as marked compared to the 12% fall in the December 2011 quarter and 38% in the quarter prior to that. Revenue growth hasn’t dipped below 15% in the past couple of years.

In the quarter ended September 30, 2011, revenue growth had grown in single digits.

The earnings scorecard for the quarter ended March 2012 was weighed down by the poor showing of industry heavyweights such as Reliance Industries, Bharti Airtel, Sterlite Industries and Sesa Goa, all of which reported a fall in profits and mounting pressure on margins.

Barring some sectors, the ETIG analysis shows, companies are unable to pass on rising expenses to end-users, a fact reflected in the continuing erosion in their operating margins before depreciation. Operating profitability shrank for the eighth consecutive quarter in March compared to a year ago.

Though it was 200 basis points higher than in the December 2011 quarter, at 19% it was still lower than the over-22% registered two years ago when the economy was recovering from the 2008-09 slowdown.