Corporate India?s performance during the previous fiscal reflected better topline and bottom line growth. The top 25 major industrial houses (according to sales) posted a 17.4% rise in net profit during 2009-10. They had reported a decline of 5.3% in net profit during the previous fiscal. On the other hand, the top line growth of the companies decreased from 20.1% to 15.8% during 2009-10.
The growth in other income turned out to be positive at 4.6% during 2009-10 from a negative of 3.7% during 2008-09. The ratio of net profit to sales decreased from 12.79% during 2007-08 to 10.08% during 2008-09 and increased thereafter to 10.21% during 2009-10.
The list of top 25 houses includes corporate heavyweights like Reliance Industries led by Mukesh Ambani, Tata, Aditya Birla, ADAG, Shiv Nadar, BK Birla and Mahindra.
A house-wise analysis indicates that Reliance Industries, Om Prakash Jindal, Bajaj and Jaiprakash Gaur have done exceptionally well. The growth in operating profit of Reliance increased to 28.5% during 2009-10 from a mere 3.9% in 2008-09. The sales growth increased from 6.3% to 35.7%. But the other income decreased significantly from Rs 5,640 crore during 2007-08 to Rs 2,468 crore during 2009-10.
The interest cost of Reliance steadily increased from Rs 1,079 crore during 2007-08 to Rs 1,747 crore during 2008-09 and Rs 1,998 crore during 2009-10. The OPM of the group decreased by 138 basis points to 17.18% during the previous fiscal from 18.56% during 2007-08.
There are some big houses whose performances have been adversely affected in terms of net profit during 2009-10 compared with 2008-09. Mention may be made of ADAG, Shiv Nadar, Videocon and Murugappa Group.
The net profit of ADAG declined by 69.3% to Rs 2,212 crore from Rs 7,198 crore. Sales also decreased by 4.2% to Rs 24,785 crore during 2009-10.
Significant declines in sales also reported by a few houses during the period under review. Murugappa Group, KK Birla, Hari S Singhania, Videocon and ADAG are among them. Sales of Murugappa group decreased by 17.2% to Rs 10,715 crore during 2009-10.
Among 25 houses, a significant sales growth was seen in the cases of Jaiprakash Gaur, Rajan Raheja , Reliance Industries, Bajaj and Mahindra. Sales of Rajan Raheja Group increased by 63.9% to Rs 6,644 crore during 2009-10. Net profit margin also increased for Mahindra, Munjal and Torrent.
A downward trend in the ratio was seen in the cases of Reliance Industries, Shiv Nadar, Videocon and Pantaloon. In terms of OPM, a steady increase was registered in the cases of Munjal (Hero), Hinduja and Torrent during the study period. On the other hand, a steady decline was seen in the case of
Reliance Industries only. In the year 2009-10, the OPM of 11 companies exceeded the average OPM of 25 houses.