More sectors join the Q1 growth party

Written by Pradip Kumar Dey | Mumbai, Aug 11 | Updated: Aug 12 2007, 05:46am hrs
Along with a growing order book, the construction sector has logged a stellar earnings performance in the first quarter of FY08. Joining the ranks of top performing sectors are the tyre industry and the entertainment sectors. An analyst from a rating agency said, Infrastructure growth is driving construction demand, primarily road, irrigation and, to some extent, the power sector. Most of the construction companies also enjoy healthy order books.

For the first quarter, the construction sector (with 60 companies) recorded a 105.6% rise in net profit. The aggregate profit climbed to Rs 1,024 crore in April-June 2007, from Rs 498 crore in the same period last year. Era Constructions, which saw an increase of 163.77% in net profit, was one of the prime contributors to this growth. Net sales of the sixty construction companies rose 42.9% to Rs 8218.37 crore during April-June 2007, from Rs 5752.24 crore during April-June 2006.

In the tyre industry, the total net profit figure of nine tyre companies grew 335.85% to touch Rs 146.14 crore during April-June 2007, from Rs 33.53 crore during the corresponding period last year. MRF Tyres was a significant contributor to the sectors growth. Its net profit gone up 420.20%, to Rs 42.5 crore during the first quarter, from Rs 8.17 crore during Q1 last year. MRFs total sales increased 10.93% during the same period. KM Mammen, chairman &managing director of MRF Ltd said, The challenges that we have been facing on the raw material front is equally formidable, as at no point of time, has the tyre industry globally been faced such a steep increase in costs of both natural rubber and oil derivatives.

Similarly, in the entertainment industry, the total net profit figure of 24 major companies went up 121.18% to Rs 200.63 crore during April-June 2007, from Rs 90.71 crore during the same period last year. Total sales of this sector increased 20.61% to Rs 758.22 crore in Q1.

Among 35 industry groups studied, the most significant growth in net sales in April-June 2007 was registered by food-processing (54.01%).