Among the industries (83) studied, only six showed negative growth in their total income during 2008-09. Mention may be made of aluminium and aluminium Products (-1.63%), automobiles-four wheelers (-6.31%), hotels (-5.83%), real estate (-34.70%), textiles-large (-3.80%) and textiles-processing (-1.33%). All the other 77 broad industry categories under which the FE 500 had been clubbed had positive growth to show.

As always, aggregates tend to conceal some real good or bad performances. Thus, even though cement products showed good income growth of 48.20%, Rain Commodities grew at the higher rate of 75.47%. The group average was also weighed up by the 47.20% income increase reported by Indian Hume Pipe?one of the biggest cement products companies. The net profit of the group also increased by 23.70% during 2008-09.

Similarly, the engineering industry saw a 30.94% income growth. But at least three engineering companies, namely Engineers India, Sunil Hitech Engineers and McNally Bharat Engg reported more than 75% increase. The net profit of the engineering group of companies increased by 20.38% to Rs 3,712 crore during 2008-09.

Among the industries studied, the best performers of the year were construction, telecommunications, computer-software mega, pharmaceutical- Indian bulk drugs and formulations, fertilisers and sugar.

The details of industry performance appear in the tables starting from page 70. Given below is a brief synopsis of the major gainers and losers of 2008-09.

Construction: The industry showed excellent results with positive growth rates in all financial indicators. While total income increased by around 41.42%, net profit went up by 24.57%. And the retained profit of the group increased by 26.53% to Rs 2,848 crore during 2008-09. And the debt-equity ratio increased from 1.01 during 2007-08 to 1.30 during 2008-09. Punj Lloyd, Lanco Infratech, Gammon India and Era Infra Engineering were among the best performers.

According to industry sources, the Indian construction industry grew by 7.2% in the year 2008-09 against 10.1% growth in 2007-08. This has primarily been on account of increased government spending on physical infrastructure in the last few years, with program- mes such as National Highway Development Programme (NHDP) and PMGSY/Bharat Nirman Programme receiving a major fillip of late.

On the basis of an analysis of the forward and backward linkages of construction, the multiplier effect for construction on the economy is estimated to be significant. With more than 27,770 enterprises involved directly in the activity of construction, the industry is one of the largest employers in the country and is characterized by a mix of both organised and unorganised entities.

Recently, the financing of infrastructure development has largely shifted to the private sector, primarily through the use of Public Private Partnership (PPP), which are based on a partnership between the public and the private sectors for the purpose of delivering a project or service traditionally provided by the public sector.

Fertilisers: This industry reported a significant growth in almost all financial indicators, with a net profit growth of 37.15% during the year 2008-09. The retained profit of this group also increased by 40.97% to Rs 1,659 crore during 2008-09. The stars in the category were Fert & Chem Travancore (378.82%), Coromandel International (136.64%) and GSFC (109.42%). The debt-equity ratio of the group decreased from 0.38 during 2007-08 to 0.17 during 2008-09.

The Indian fertiliser industry has been rapidly growing during the last several years. While urea is under price and movement control, the phosphatic fertilisers continue to be under the indirect control of the government. The government made certain changes in the policies relating to the concession scheme for phosphatic and potasic (P&K) fertilisers. The government changed the payment of subsidy on urea from a despatch basis to receipt basis and in case of ANP, payment of concession was changed from a sale basis to receipt basis. The government also rationalised selling prices of all fertilisers based on their nutrient contents w.e.f. June 18, 2008.

FMCG: This industry reported positive growth in all financial indicators, with net profit growth of 3.13% during the year 2008-09. The retained profit of this group also increased by 42.25% to Rs 2,183 crore during 2008-09. Nestle Colgate Palmolive, Procter & Gamble and Dabur did well during the year.

The better performance of Nestle is reflected in the net profit growth of 29.06% during 2008-09. The retained profit of the company also increased by 105.58% to Rs 196.62 crore during 2008-09.

According to the directors? report, the milk products and nutrition business continued to perform well as per expectations. Staggered price increases and cost optimisation initiatives contributed to offset a steep increase in commodity prices like milk solids, green coffee, fuels and vegetable fat. In the year 2009-10, the economic environment is going to be more challenging and will require innovative thinking, agility and speed in anticipating changes. Companies should continue to direct its efforts on product innovation and renovation, to control costs, improve penetration and manage price-value relationship for its brands in increasingly difficult market conditions.

Cement: The cement industry showed a somewhat better performance in terms of sales during 2008-09 with total income of 17 major cement companies increasing by just 21.20% but net profit decreased by 9.61%.

The lower profitability of the cement companies during the year 2008-09 has been due to the ban of exports, spiraling input costs, especially coal and freight and lower demand in the international markets. This is reflected in the performance of ACC, whose net profit decreased by 15.70% during the year 2008-09. The retained profit of the company also decreased by 21.26% to Rs 837.46 crore during 2008-09.

India?s cement industry recorded a growth of 7.8% in the year 2008 in the Indian economy. The change of excise duty structure imposed by the government affected sales realisation. Some companies in the cement industry had voluntarily decided to hold cement prices in response to the government?s concerns over acceleration in inflation and therefore were unable to materially pass on the increases in input cost to customers. This was also responsible for lowering profitability of cement companies. A ban of cement exports was also implemented, and these measures had an immediate impact on demand and reduced the growth.

Automobiles- four wheelers: The industry?s total income decreased by 6.31% and net profit decreased by 40.49% during the year 2008-09. Ashok Leyland, Tata Motors, Hindustan Motors and Saraj Mazda experienced a significant decrease in total income during the year 2008-09. Among these four companies, highest decrease in income (-25.48%) was seen in the case of Ashok Leyland.

The financial year 2008-09 witnessed unprecedented fluctuation in the macro-economy both globally and in India. The global meltdown and high fuel prices, especially after September 2008 with vehicle financing and demand drying up, impacted auto industry worldwide.

In India, car loans, which are a critical growth driver for the industry, saw a major curtailment by banks and finance companies, owing to a liquidity crunch and court directives against forced repossession of financed assets during default. Most commodity prices went up and this hurt the profits of manufacturing businesses and disposable incomes of households alike. All these factors hit the passenger vehicle industry severely during 2008-09.

Computers-software (mega): The aggregate total income of the industry increased by 21.42% to Rs 79,975 crore in 2008-09. The net profit of the industry showed an increase of 17.42% during the year under study and the retained profit of the industry increased by 36.95% during the year 2008-09. Infosys Technologies, Tech Mahindra, TCS, Mphasis and Wipro were among the star performers. The net profit of Mphasis and Infosys Technologies increased by 139.63% and 30.18% respectively during the year.

According to the director?s report, changing economic and business conditions, rapid technological innovation, proliferation of the Internet, and globalisation are creating an increasingly competitive market environment that is driving corporations to transform the manner in which they operate. India is recognised as the premier destination for offshore technology services.

According to a factsheet published by Nasscom in February 2009, IT services (excluding business process outsourcing (BPO), product development and engineering services) exports from India are expected to cross $26.9 billion in the 2009 fiscal and BPO exports from India are expected to cross $12.8 billion during the same period.

Pharmaceuticals-Indian-bulk drugs & formulations: The industry has performed better in terms of total income in 2008-09, with aggregate total income of 15 companies rising by 15.37% to Rs 31,577 crore during 2008-09. Net profit and retained profit decreased by 33.83% and 38.03% respectively during the same period. Companies like Cipla, Dr Reddys, Laboratories, Sun Pharma and Torrent Pharma did well during the year. The debt-equity ratio of the group marginally increased from 0.47 in 2007-08 to 0.48 in 2008-09.

The Indian pharmaceutical market registered an annual growth of 9.8%. The chronic therapy segment recorded a growth of 13.1% and contributed 28.3% to the total market, while the acute therapy segment grew at a rate of 8.6%. The overall market growth was a mix of higher volume of existing products, new product introductions and price increases, with all three witnessing a positive trend.

Approximately 75% of the overall market growth was led by volume increases in existing products. The market has a potential to reach $30 billion by 2020 on the back of increasing health insurance and awareness, affordability, doctor and clinical reach, growing organised pharmaceutical retail segment and various other factors.

Sugar: The industry has done significantly well during the year 2008-09, with aggregate income rising by 38.44% to Rs 12,233 crore in 2008-09. Net profit and retained profit increased significantly. Net profit and retained profit of the group increased by 340.38% to Rs 978.57 crore and 329.59% to Rs 732.62 crore respectively during 2008-09. Companies like Shree Renuka Sugars, EID Parry, Oudh Sugar Mills, Bannari Amman Sugars and Balrampur Chini did well during the year. The net profit of Shree Renuka Sugars increased by 70.48% to Rs 92.79 crore during 2008-09.

The Indian sugar industry is one of the largest agro based industry. It has significant standing in the world sugar market. The industry is regulated by the central/state governments by means of mandated command area, formula based pricing, monthly release mechanism, import-export policy, free sugar policy etc. The Indian sugar production during the season 2008-09 is expected to be 145-150 lakh tonne as against the estimated domestic consumption of 220-225 lakh tonne. It is estimated that in the next sugar season also India?s sugar production would fall short of domestic consumption. The Indian sugar industry is one of the most diversified industries. It has the capacity to produce 2500 million litre of alcohol/ethanol and 7000MW power. The industry is a key contributor to renewable sources of energy.

Telecommunications-service providers: The industry has performed well in 2008-09, with aggregate income rising by 22.67% to Rs 73,729 crore in 2008-09. Net profit and retained profit increased dramatically. Net profit of the group increased by 22.40% to Rs 13,546 crore during 2008-09. Companies like Reliance Communications, Bharti Airtel, Tulip Telecom, Tata Communications did well during the year. The net profit of Reliance Communications increased by 85.69% to Rs 4,802 crore during 2008-09.

According to the directors report, the Indian telecom sector has seen a phenomenal growth and currently has Cclose to 430 million telecom customers. The market surpassed the US to become the second largest market in the world after China. Notwithstanding this, the telecom penetration is only 37% with a wireless penetration of 33.7% and broadband penetration of 0.54%, thereby offering a good growth potential.