Depth in growth story

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: One of the most significant trends for the year has been widespread growth in income. Of the 81 industries studied, 79 broad industry categories had positive growth to show withonly two showing negative growth during 2005-06. The ones to lag were textiles-composite (-4.41 %) and trading (-3.03%).

As always, aggregates tend to conceal real good or bad performances or individual companies. So while the mining/minerals/ metals sector posted an income growth of 48.54 %, its key constituent, Sterlite Inds, grew at the higher rate of 82.94 %. The group average was also boosted by the 87.92% income increase reported by Hindustan Copper. Incidentally, net profit of the sector increased by 56.61% during 2005-06. Similarly, the hotel industry saw an overall 28.56% income growth. But at least two hotel companies, namely Indian Hotel and EIH, reported increases of over 28%. The net profit of the hotel sector companies increased by 140.14% to Rs 502.45 crore during 2005-06. Among the industries studied, the best performers of the year were construction, electric equipment, computer software-mega, sugar and cement and products.

The details of industry performance appear in the tables starting from page 76.

Given below is a brief synopsis of the major gainers and losers of 2005-06:

Construction: The industry showed excellent results with positive growth rates in all financial indicators. While total income increased by around 27.52 %, net profit grew by 149.06 %. A significant development was that the retained profit of the group increased by 173.30% to touch Rs 1,247.36 crore during 2005-06. On the back of strong retention, the debt-equity ratio decreased from 1.61 during 2004-05 to 1.04 during 2005-06. JP Associates, Subhash Projects, Era Constructions, Nagarjuna Construction and HCC were among the best performers.

The long neglected investments in infrastructure have just started to pick up. The requirements are massive and urgent. However, given the increased focus on public sector spending in this area and a framework for operational -zing, suitable public-private partnerships (PPP), investments in infrastructure and construction sectors, are expected to remain buoyant.