The global financial meltdown has not only put companies on guard, it has also given way to losses significantly higher than in the recent past.
A study carried of 3,400 companies, carried out by FE, has revealed that around 26% of them reported losses in the second quarter of the current fiscal.
It is, however, the extent of losses that could pose a problem for India Inc. The study has revealed that losses for the companies under review, taken together, were Rs 18,025 crore for the July-September 2008 quarter, representing a 499% jump over losses (Rs 3,006 crore) registered in the same period last fiscal.
Despite the steep rise in quantum of losses, the number of companies ending the quarter in the red has seen a marginal growth; from 884 companies in year-ago period, it has now reached 891 companies.
Cumulative sales of the 891 loss-making companies for the July-September 2008 quarter was Rs 2.11 lakh crore. Sales of 884 loss-making companies in the year-ago period was Rs 15,342 crore.
Commenting on the figures, an analyst from a rating agency said, “The profit performance of listed companies has been affected due to inflation and the global financial crisis. It can be seen, however, that a few big companies (except some refineries and airlines) registered better profit performance.”
During the July-September 2008 quarter, the top five loss-making companies were Indian Oil (Rs 7,047 crore), HPCL (Rs 3,219 crore), BPCL (Rs 2,625 crore), Kingfisher Air (Rs 483 crore) and Jet Airways (Rs 384 crore).
Top-five loss-making companies in the year-ago period were Kingfisher Air (Rs 253 crore), Hind Photo Films (Rs 188 crore), ITI (Rs 124 crore), Shah Alloys (Rs 98 crore) and Vishal Exports (Rs 98 crore). Only Kingfisher Air occurs in the top five loss-making companies’ list for both periods.
Industry verticals that registered losses over Rs 200 crore during the July-September 2008 quarter were refineries, airlines, pharmaceuticals, textiles, telecommunications, entertainment and steel, the study found.
Significant increase in loss was seen in the case of refineries (Rs 14 crore during July-September ’07 to Rs 13,075 crore during July-September ’08), airlines (Rs 292 crore to Rs 1,028 crore), textiles (Rs 203 crore to Rs 532 crore), entertainment (Rs 144 crore to Rs 274 crore) and pharmaceuticals (Rs 88 crore to Rs 612 crore).