Inventories of major cos up 17.49% in FY11: Study

Written by Pradip Kumar Dey | Mumbai | Updated: Sep 30 2011, 07:43am hrs
A study of trends in the inventories of 817 major companies between 2008-09 and 2010-11 shows inventory ratio for these companies increased to 17.49% in 2010-11, reflecting poor management of inventories by the big corporate sector.

In absolute terms, the total inventories of these companies increased to R2.48 lakh crore during financial year 2010-11 from R1.63 lakh crore during financial year 2008-09.

Of the total 817 companies measured in the study, 354 reported a decline in the inventories to sales ratio. The sectors where the ratio rose particularly were the steel and textiles industry.

Among the industries studied, eight industries, had inventory-to-sales ratios above 20 % during 2010-11. Mention may be made of air conditioners, cigarettes, engineering, jems & jewellery, pharmaceuticals, sugar and textiles.

In 2008-09, there were seven industries with inventories-to-sales ratios of 20% or more. Mention may be made of diversified, cigarettes, pharmaceuticals, sugar and pesticides. Those with very low inventory-to-sales ratios in 2010-11 were auto ancillaries, automobiles, paper, fertilisers, refineries and petrochemicals.