Reading a company's results
Top line, bottom line, and whether growth came from the company's own business or from one it bought
Listing rules as amended to 22 Jan 2026
Verified 12 October 2026
For training and education only. Not investment advice.
Trainer notes
Ask: a company's sales grew 20% this year. Did its profit grow? Most of the room will say yes. Slide 5 shows a case where sales rose 20% and profit fell. Keep the answers until then.
Results answer two questions: how much did the company sell, and how much of that was left as profit.
Sales are the top line. Profit after tax is the bottom line. Most of the reading lies in working out why the two did not move together.
Trainer notes
The names come from where the two figures sit in the statement of profit and loss: revenue is the first line and profit for the period is near the bottom.
Four terms to know
Top line
Revenue from operations: what the company billed for its products and services in the period.
Bottom line
Profit for the period: what is left after all expenses, interest and tax. Also called net profit.
Organic growth
Growth from the company's existing business: more units sold, higher prices, new products or outlets.
Inorganic growth
Growth that comes from buying another business or merging with one. Its sales are added to the buyer's.
Take-away: Profit margin = profit after tax ÷ sales. It links the bottom line to the top line.
Trainer notes
'Revenue from operations' and 'profit for the period' are the names used in the format of accounts that Indian companies follow. Some people use 'bottom line' for profit before tax; ask which is meant.
The lines between top and bottom
| Line in the statement | What it is | What to look for |
|---|---|---|
| Revenue from operations | Sale of products and services and other operating revenue. The top line. | Whether growth came from volume, price or a purchase. |
| Other income | Interest, dividends and other income from outside the main business. | A large part of the profit coming from this line. |
| Expenses | Materials, employee costs, finance costs, depreciation and other expenses. | Any cost that grew faster than sales. |
| Exceptional items | Unusual gains or losses, shown on a line of their own. | Profit before this line and after it. |
| Profit for the period | What is left after tax. The bottom line. Earnings per share follows it. | Whether profit per share moved the same way. |
Source: Schedule III to the Companies Act, 2013, Division II, Part II (format of the statement of profit and loss).
Trainer notes
Tax expense sits between exceptional items and profit for the period. Below profit for the period the statement also shows 'other comprehensive income', which holds certain gains and losses that have not passed through profit.
Sales up, profit down
COMPANY R
Last year: sales ₹1,000 crore, all costs ₹900 crore.
This year: sales ₹1,200 crore, all costs ₹1,104 crore.
Tax at an assumed 25% in both years.
- Last year: profit before tax 1,000 − 900 = ₹100 crore. Tax ₹25 crore. Profit after tax ₹75 crore.
- This year: profit before tax 1,200 − 1,104 = ₹96 crore. Tax ₹24 crore. Profit after tax ₹72 crore.
- Top line: up ₹200 crore, or 20%. Bottom line: down ₹3 crore, or 4%.
- Margin: 75 ÷ 1,000 = 7.5% last year. 72 ÷ 1,200 = 6.0% this year.
Result: Costs rose by ₹204 crore while sales rose by ₹200 crore. Growth in sales did not reach the profit.
Illustration with an invented company and assumed figures.
Trainer notes
Return to the opening question. Reasons this happens in practice include higher input prices, discounts given to win sales, new capacity that is not yet fully used, and higher interest. The example takes no view on which is at work.
Four ways the bottom line can grow
Selling more
More units sold. The top line grows, and profit grows with it if the margin holds.
Charging more
A higher price for each unit. The top line grows even if the number of units does not.
Spending less
Lower costs for each rupee of sales. Profit can grow with no growth in the top line at all.
One-time items
A gain on selling an asset, for example. It lifts this period's profit and may not come again.
Take-away: The first two show up in the top line. The last two change the bottom line only.
Trainer notes
Lower interest or a lower tax charge also lift the bottom line without any change in sales. Companies often explain the mix of volume and price in their results presentation; it is not a line in the statement.
How much of the growth was bought?
COMPANY T
Sales: ₹2,000 crore last year, ₹2,600 crore this year. ₹400 crore of this year's sales came from a business bought in the year.
Profit after tax: ₹200 crore, then ₹230 crore. Shares: 10 crore, then 12 crore.
- Reported growth in sales: (2,600 − 2,000) ÷ 2,000 = 30%.
- Without the purchase: 2,600 − 400 = ₹2,200 crore. Organic growth: 200 ÷ 2,000 = 10%.
- Profit after tax: (230 − 200) ÷ 200 = up 15%.
- Profit per share: 200 ÷ 10 = ₹20.00 last year. 230 ÷ 12 = ₹19.17 this year. Down about 4%.
Result: Sales up 30%, profit up 15%, profit per share down 4%. Each figure answers a different question.
Illustration with an invented company and assumed figures. New shares assumed issued to pay for the purchase.
Trainer notes
A purchase is paid for with cash, borrowing or new shares, so the cost shows up as lower other income, higher interest or more shares. Once the bought business is in both of the years being compared, it no longer adds to reported growth.
Growth compared with what
| Comparison | What is compared | Point to note |
|---|---|---|
| Year on year | This quarter against the same quarter a year ago. | Takes out seasons such as festival or monsoon quarters. |
| Quarter on quarter | This quarter against the one just before it. | Shows the recent trend, but seasons can distort it. |
| Standalone or consolidated | The company alone, or together with its subsidiaries. | In a group, much of the business may sit in subsidiaries. |
| Reported or like-for-like | All sales, or sales leaving out businesses bought or sold. | Like-for-like growth is the organic part. |
A listed company with subsidiaries gives both standalone and consolidated results each quarter: SEBI listing regulations, regulation 33(3).
Trainer notes
Like-for-like figures are usually the company's own calculation, given in its presentation or commentary. They are not an audited line, and companies define them differently.
The reporting calendar
When a listed company has to publish, under SEBI's listing regulations as amended up to 22 January 2026.
- QUARTERLY RESULTS
- 45 daysFrom the end of each of the first three quarters. They may be unaudited, with a limited review.
- AUDITED ANNUAL RESULTS
- 60 daysFrom the end of the financial year. The fourth quarter's figures come with them.
- NEWSPAPER NOTICE
- 48 hoursFrom the end of the board meeting that approved the results. It carries a QR code and web link.
Source: SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, regulations 33(3) and 47(1), as amended up to 22 Jan 2026.
Trainer notes
For a company with a March year-end, 45 days from 30 June is 14 August and 60 days from 31 March is 30 May. Companies listed on an SME exchange report half-yearly instead of quarterly. A company under an approved insolvency resolution plan gets longer. A Second Amendment of 10 July 2026 was found; check it does not touch regulations 33 or 47.
If you learnt this from older material
What older material says
- A listed company may choose whether to give consolidated results each quarter.
- The results are printed in the newspaper.
- The reader works out the ratios from the accounts.
What holds now
- Since 1 April 2019 a company with subsidiaries must give them every quarter.
- Since 13 December 2024 a notice with a QR code and web link is enough.
- Annual accounts disclose eleven ratios under Schedule III, from 2021-22.
Take-away: The ideas of top line, bottom line, organic and inorganic growth are unchanged.
Sources: SEBI listing regulations, regulations 33(3)(b) and 47(1), with amendment footnotes; Schedule III, Division II.
Trainer notes
A company may still print its full results in the newspaper if it chooses. Ind AS means the Indian Accounting Standards; the ratio disclosure applies to Ind AS and other companies under Divisions I and II of Schedule III. The eleven ratios include the net profit ratio, return on equity and return on capital employed; see the deck 'ROCE and ROE'.
Four things people get wrong
Misconception'Sales grew, so profit grew.'
What is trueCosts can rise faster than sales. Read the margin alongside the two growth figures.
Misconception'A jump in profit means a strong quarter.'
What is trueCheck for an exceptional item or a rise in other income. A one-time gain may not come again.
Misconception'A bigger company earns more per share.'
What is trueA purchase adds sales at once. Profit per share depends on the price paid and on the debt taken or shares issued to pay it.
Misconception'Compare with the last quarter.'
What is trueMany businesses are seasonal. The same quarter a year ago is usually the fairer comparison.
Trainer notes
None of these is a rule about which companies do well. They are checks to run before repeating a headline. Do not use a results headline to suggest buying or selling a share or a fund.
Check yourself
Question 1: Sales rose from ₹800 crore to ₹1,000 crore. Profit after tax rose from ₹80 crore to ₹90 crore. By how much did each grow, and what happened to the margin?
Answer: Sales up 25%. Profit up 12.5%. Margin fell from 80 ÷ 800 = 10% to 90 ÷ 1,000 = 9%.Question 2: Sales went from ₹1,500 crore to ₹1,950 crore. ₹300 crore of the new figure came from a business bought in the year. What are reported and organic growth?
Answer: Reported: 450 ÷ 1,500 = 30%. Without the purchase: 1,950 − 300 = ₹1,650 crore, so organic growth is 150 ÷ 1,500 = 10%.Question 3: A client says: 'The company's profit doubled this quarter, so it is doing very well.' What would you look at before agreeing?
Answer: Whether there is an exceptional item or unusual other income, what sales did, which quarter it is compared with, and whether the figures are standalone or consolidated. We explain the numbers; we do not rate the company.
Trainer notes
Question 2 mirrors slide 7. If the room gets 30% but not 10%, go back to that slide.
Sources and disclaimer
Sources for the figures in this explainer
- Lines of the statement of profit and loss: Schedule III to the Companies Act, 2013, Division II, Part II, as reproduced by ICAI.
- Quarterly results in 45 days, audited annual results in 60 days, consolidated results: SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, regulation 33(3).
- Newspaper notice within 48 hours with QR code, from 13 Dec 2024: same regulations, regulation 47(1) and its amendment footnote. Text read as amended up to 22 Jan 2026.
- Consolidated quarterly results mandatory from 1 April 2019: same regulations, footnote to regulation 33(3)(b).
- Eleven ratios in Ind AS annual accounts for years starting on or after 1 April 2021: Schedule III, Division II; ICAI Guidance Note, January 2022 edition.
- Companies R and T and all their figures, including the 25% tax rate, are invented for illustration. They do not refer to any real company.
This material is for training and investor education only. It is not investment, tax or legal advice and is not a recommendation to buy, sell or hold any security or scheme. Examples use assumed figures unless a source and date are shown. Mutual fund investments are subject to market risks; read all scheme related documents carefully. Trustner Asset Services Pvt. Ltd. is an AMFI-registered Mutual Fund Distributor (ARN-286886).