With economic activities picking up across sectors, if corporate earnings have swelled in the second quarter of the current fiscal, the number of loss-making companies has also gone down significantly. According to a study carried out by FE, of the 3,169 quoted companies, only 17.2% or 544 recorded losses during July-September 2009.
This is an 11.4% decrease from the number reported during the same period last year, when around 614 companies or 19.4% reported losses. And, it is not just the number of loss-making companies that has decreased, even their quantum of losses has. In terms of value, the loss amount has decreased steadily by 74.3% to Rs 4,541 crore in July-September 2009 from Rs 17,690 crore in the year-ago period.
The study also notes that airlines dominated the list of loss-making companies in both the quarters. During July-September 2009, the top five loss-making companies were PVP Ventures, Kingfisher Airlines, Jet Airways, Suzlon Energy and BPCL while in Q2 2008 they were IOC, HPCL, BPCL, King fisher Airlines and Jet Airways. The trio of Jet Airways, King fisher Airlines and BPCL are common in both the lists.
According to Dr Dogra, MD & CEO, CARE, ?Stimulus packages offered by governments across the world have led to a demand growth in most countries, particularly in India.?
The direct benefit of these stimulus package have been sectors like automobiles, metals, tyres, textiles and consumer durables due to improved consumer spending, lower interest rates and fiscal measures. Sales growth have been flat, considering most of the industries in the manufacturing sector with cost reduction measures and lower interest rates during the current quarter QFY10 results shown better profitability on a y-o-y basis.?
Significant increase in loss was seen in case of sectors such as construction, electric equipment, paper, retailing and shipping. Construction companies saw their loss increasing from Rs 19 crore during July-September 08 to Rs 610 crore this year.
A downward trend in loss was seen in the case of auto and ancillaries, gems & jewellery, electronics, engineering, entertainments, fertilisers, NBFC, petrochemicals, pharmaceuticals, refineries, sugar, textiles, trading and airlines. The loss of textiles companies decreased 42.8% to Rs 286 crore this Q2 from Rs 501 crore in Q2 2008.
