India Inc’s PAT to grow at 23% this fiscal: CMIE

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Mumbai: India Inc is likely to witness a 22.8% growth in its profit after tax (PAT) in the current fiscal, an economic think-tank has said in its report. “Corporate sales growth will average at a meagre 4.1% in 2009-10. At the same time, the PAT will rise by a robust 22.8%,” the Centre for Monitoring Indian Economy (CMIE) said in its latest report.

The manufacturing sector (excluding petroleum sector) would report a 24.3% growth in PAT mainly because of low prices of raw material and soft interest rates, CMIE said, adding that the PAT of the financial and non-financial services would rise by 32.2% and 20.4%, respectively.

According to the report, corporate India took a hit in its sales owing to a fall in commodity prices, drying up of export demand and postponement of purchases by domestic consumers following the global liquidity crisis. “From 35% in the first-half of 2008-09, India Inc’s sales growth slumped to 12.1% and 0.1% in December 2008 and March 2009 quarters, respectively,” CMIE said.

However, the corporate sector managed to protect its profits from the impact of the global liquidity crisis, as the PAT rose by 16% in the March-2009 quarter. The growth further accelerated to 19.9% in June-2009 quarter, CMIE said.

“We estimate corporate profits to have grown 44% in Q2 FY10 due to the handsome PAT likely to have been made by the petroleum products sector against the losses incurred in the year-ago quarter,” it said.

The aggregate PAT of the rest of the manufacturing sector is also estimated to have risen by a modest 4.5%, the report said, adding, “we estimate the PAT of the financial and non-financial services to have risen by 26-29%.” Sales, however, is estimated to have fallen by 5.3%, it said.