Big industrial houses hold fort in trying times

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Mumbai, Nov 22 : Even as the debate over the effect of the global meltdown on India continues, one section of corporate India is holding the flag of the India story high. The second quarter for the key industrial houses in India has been a tad different from the entire India Inc. While India Inc witnessed a more than 15% slide in net earnings and 30% growth in revenue, the big industrial houses have managed to minimise the slide in earnings and maintain strong revenue growth.

The top 100 industrial houses or business families have seen total sales increase by 36.4% to touch Rs 2.36 lakh crore in July to September 2008, against Rs 1.73 lakh crore in July to September 2007. And in absolute terms, the total net profit of the 100 largest business houses has decreased 2.1% to Rs 20,972 crore in July to September 2008, from Rs 21,429 crore in July to September 2007.

Also while other income of India Inc fell due to tough market conditions, the total other income of the studied houses increased 5% to Rs 5,663 crore in July to September 2008, from Rs 5,394 crore during July to September last year.

“This clearly shows that the industrial houses have managed to work their companies well and build on the synergies and interdependencies that exist within the group. Usually standalone companies do not have this advantage,” says Rajesh Majethia, a Mumbai-based equity analyst. And this, he says, has some of the industrial houses get a premium rating in the market place.

Around 11 groups or houses actually clocked a 45% increase in net profit, and this is staggering at a time when there is widespread slowdown. Mention may be made of Hero Group of the Munjals, Adani, Torrent, Sriram Thyagaraj, Lloyds, Alchemie Group and Nava Bharat.

While the Mukesh Ambani-owned group topped the list with sales of Rs 44,804 crore in July to September 2008, the Sanjay Dalmia Group featured at the bottom of the pecking order came last with Rs 359 crore. Of the remaining houses, Tata,Aditya Birla Mgmt Corp, Essar and Jindal Om Prakash had sales exceeding Rs 90,00 crore each.