If Infosys disappointed the Street with a lower-than-expected bottom line, peer Tata Consultancy Services (TCS) sprang a pleasant surprise with a good set of numbers for the three months to June 2010. However, a glance at the data for a sample of 49 companies shows the growth in the bottom line is a rather muted 13.5% year-on-year.
That?s somewhat disappointing given that the net profits for the same sample were up nearly 17% year-on-year in the March 2010 quarter. Surprisingly, the top line growth for this clutch of companies has seen a fairly good increase of nearly 18% in the June quarter, compared with a rise of just 11.5% in the March 2010 quarter.
The operating profit margin (OPM) too has been slightly better at 27.3% this time around. However, operating margins in the June 2010 quarter have remained more or less flat compared to the comparable period of the previous year?thanks to an increase in the cost of raw materials.
TCS? results were marked by a strong improvement in volumes; the company reported ten big deals and has indicated that it is pursuing several more. Toothpaste maker Colgate reported an impressive top line growth on the back of a 14% increase in volumes while battery-maker Exide has managed to grow is top line by 27.5% year-on-year, in the wake of strong automobile sales.
Castrol too posted a good set of results with net profits up 17% year-on-year, thanks to good realisations. However, the company?s operating margins were lower by about 60 basis points year-on-year at 30.4%, despite a lower-than-expected raw materials bill.
A strong economy has helped revive the fortunes of Hotel Leelaventure, whose revenues were up a fairly good 25% year-on-year on the back of better occupancies of 64% and higher room rates, resulting in a jump in operating margins which expanded 780 basis points year-on-year to around 29%.
The momentum in the economy is reflected in the performance of banking companies (not part of the sample). Axis Bank turned in some sterling numbers with net profits up 32% with a 40% jump in loans driving a 45% increase in net interest income. Although lower than expected capital gains led to HDFC?s net profit numbers for the June 2010 quarter coming in below estimates, the home loan firm did brisk business with overall disbursements growing at a strong at 25-30% and net interest income up 34%.