India Inc logs higher profits in Q2 but with a dip in topline

Font Size

Print

Feedback

Email

Discuss

Related Articles

RCoM unveils 1 paise per SMSHindalco closes QIP issue

Mumbai: The stock markets, in general, may have been anticipating a better performance by many industry segments in the months ahead, a closer look at India Inc’s second quarter performance reflects a not-so-rosy picture. Broadly, companies in may sectors have achieved higher profit growth mainly on account of cost optimisation, better inventory management and lower interest costs. However, there has been a decline in the topline growth. The 1,314 companies for which second quarterly results were available with FE, posted a 8.1% decrease to Rs 5.93 lakh crore in aggregate net sales while overall net profit grew 43.9% to Rs 55,462 crore during the quarter ended September 2009. Other income increased 22.3% to Rs 24,073 crore during the second quarter. The PAT to sales ratio also increased from 5.97% during the second quarter of the previous fiscal to 9.35%. Raw material cost of these companies has increased marginally by 3.2% to Rs 2.11 lakh crore during Q2.

But the interest outgo of these companies increased by 21.1% to Rs 81,686 crore during Q2.

DR Dogra, DMD, CARE said: “ On account of slowdown in several industries, the demand for various products have reduced, thereby, resulting in reduction in the total income of corporates during the quarter ended September 2009, compared same period last fiscal. However, due to various cost-optimisation measures adopted by many companies during the slowdown as also reduction in cost of raw materials coupled with reduction in interest cost have resulted in increase in profits during the second quarter.”

Industry-wise analysis indicates that sugar, automobiles and tea have done exceptionally well during the quarter.

The total net profit figure of sugar companies rose 535.9% to Rs 151 crore during the second quarter of 2009, from Rs 24 crore. The sales figure of this segment also increased by 34.2% to Rs 2,193 crore during Q2. Most sugar companies such as KCP Sugar & Industries (net profit up 210.6% to Rs 17.02crore), Sakthi Sugar (net profit up from Rs 2.17 crore to Rs 43.34 crore) and Bannari Amman Sugar (net profit increased 39.9% to Rs 42.09 crore) registered good profit performance during Q2.