The performance of 3,042 companies showed their net sales increasing by 3.7 per cent in the second quarter of 2014-15 compared with 9.4 per cent in the same period of previous year, a study by Care Ratings said.
The study also showed that net profit of these companies grew by 14.7 per cent against a negative growth of 24 per cent in the second quarter of 2013-14.
The half-yearly performance for 2,913 companies showed that net sales increased by 6.4 per cent (8.6 per cent) and net profit by 21.6 per cent (6.3 per cent).
However, a sub-sample of 2,986 companies, excluding banks, IT and oil companies, showed that net sales increased by 6.4 per cent in the second quarter this year as against 6.7 per cent in the previous year while net profit increased by 28.7 per cent (-16.6 per cent last year). Lower growth in costs, especially interest costs did assist in pushing the profits up.
Consequently, net profit margins increased to 8.1 per cent as against 6.7 per cent in the second quarter of 2013-14.
When looking at the half yearly performance of 2,759 companies, excluding banks, IT and oil companies, their net sales went up by 6.3 per cent in the first half of this fiscal as against 6.9 per cent in the previous year, while net profit rose by 23.4 per cent.
Net profit margins increased to 8.4 per cent as against 7.2 per cent in the first half of FY2013-14, the report said.
In the banking sector, the financial performance of 40 banking companies indicate that the aggregate net sales (interest earned) increased by 11.8 per cent in the first half of the current financial year as against 11 per cent recorded in the corresponding period of the previous fiscal.
The provisions and contingencies, which include provisions for NPAs declined by 3.9 per cent vis-a-vis a positive growth of 53.7 per cent over the corresponding period in the first half of 2013-14.
The study showed that net profits recorded an increase of 13.1 per cent in the six month period as against growth of 10.8 per cent in the year-ago period.
Net profit margin increased slightly to 9.1 per cent in the April-September 2015 as against 9 per cent in the same period last year.
“The gross NPA ratio increased to 4.1 per cent in H1 FY15 as compared to 3.9 per cent in H1 FY14. While 27 out of 40 banks witnessed an increase in their gross NPA ratio, 13 banks witnessed a decline.
“On the positive side, all the banks have maintained capital adequacy ratio of above 10 per cent,” the report said.
In IT sector, a sample of 120 companies showed that net sales rose by 11.2 per cent in H1 FY15 as against 22.3 per cent in the previous year while net profit increased by 17.4 per cent (24.2 per cent last year).
Profit margin shows an improvement to 20.8 per cent as against 19.7 per cent in H1 FY14, it said.
“Among oil companies, a sample of 9 firms showed that net sales stood at 3.9 per cent in H1 FY15 as against 8.8 per cent in the previous year while net profit grew by 31.3 per cent in H1 FY15. Profit margin show an improvement to 3.6 per cent as against 2.8 per cent in H1 FY14,” it added.