India Inc power cost under control

Mumbai, Nov 20 | Updated: Nov 21 2005, 05:42am hrs
The hike in the fuel prices by the government during the first half of the current fiscal (April-October 2005) may have taken its toll on the profitability of India Inc but the efficient power and fuel (P&F) cost management by the companies has led to a marginal decline in the share of P&F cost in the total corporate expenditure to almost 17% in the first half of the year.

The aggregate expenditure of the 485 major companies on P&F increased by 4.8% to Rs 12,388 crore during April-September 2005 from of Rs 11,823 crore during April-September 2004. On the other hand, the total expenditure of the sample companies increased by 9.97% to Rs 73,325 crore during April-September 2005 from the level of Rs 66,680 crore during April-September 2004. Though P&F expenditure may have gone up marginally on the back of fuel price hike, the share of P&F cost in the total expenditure decreased from 17.73% to 16.89% during the study period.

This, according to analysts, shows the efficiency of corporates that even when the fuel prices have been increased, the P&F cost has come down. The decreasing share of P&F in total expenditure has also helped in increasing the profit margins and has encouraged cost control measures, they added.