India Inc?s results for the three months to December 2012 did not provide much evidence of an imminent recovery in economic activity. Earnings as net sales grew by just 8% year-on-year in the quarter compared with 10% y-o-y in the quarter ended September 2012.
Net profit of firms grew by 10% y-o-y in the quarter ended December 2012 as compared with 13% in the previous quarter. Operating profit grew 12.15% in the December quarter as compared with 9.7% in the September quarter. India Inc doesn?t seem to be paying too much tax as the tax outflow dropped 1.54% in the quarter ended December. However, companies are paying big interest bills as finance charges rose 19% in the quarter ended December. Fixed costs like wages and interest continued to rise faster than sales, further pressuring margins.
Order books of key industrial and construction companies grew 16% y-o-y in the quarter ended December continuing the trend seen in the past few quarters, data from Kotak Institutional Equities Research shows.
Other income of companies in the quarter ended December remained flat at 0.43% in the quarter ended December last year as compared with 16.81% in the quarter ended September last year, a clear indication that growth in other income is now slowing down. Total expenditure of companies grew by 7.6% y-o-y in the December 2012 quarter as compared with around 11% in quarter ended September last year.
