Financial Daily from THE HINDU group of publications
Monday, Nov 07, 2005


Group Sites

Home Page - Financial Performance
Corporate - Insight
Industry & Economy - Economy

India Inc profit growth stays buoyant in Q2 — Margins decline, tax incidence rises

Suresh Krishnamurthy

PROFIT growth of non-oil, non-banking listed Indian firms has stayed robust in the quarter ended September 2005. Aggregate profits of 2,150 non-oil, non-banking firms have risen 26 per cent over the corresponding quarter of the previous year.

Growth in "other income" of 21 per cent, robs some sheen off the performance. Profit growth is also lower than the 56 per cent growth reported in the corresponding quarter of the previous year. Still, the rate of growth is quite impressive considering the higher base.

Besides, sales growth at 16 per cent was almost as strong as the 21 per cent recorded in the comparable quarter last year. In addition, 847 firms reported profit growth in excess of 30 per cent and 444 firms reported losses. The comparable numbers for the previous year are 691 and 536.

There are, however, signs that the story of expanding margins and higher return on net worth may be largely over. This is because there is a slight decline in operating margins.

In addition, taxes are also rising. Benefits from tax shelters appear to have come down as in the case of SAIL, which no longer enjoys the protection of losses made in earlier years.

Companies from industries such as sugar (Balrampur Chini), construction (Hindustan Construction), textiles (Arvind Mills), chemicals (Colour Chem), shipping (GE Shipping), power equipment (ABB), mining (National Mineral Development) and information technology (Infosys Technologies) reported significant growth in profits.

Companies from sectors such as carbon black (Phillips Carbon), steel (Ispat Industries), broadcasting (Zee Telefilms), healthcare (Nicholas Piramal), aluminium (National Aluminium), power producers (NTPC) were some of the under performers.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Tata Safari Dicor

Stories in this Section
Turbulence shifts to south TN; but drenches Chennai

Festive season boosts sales of white goods, CTVs
Sector funds with broader themes provide substantial diversification
India Inc profit growth stays buoyant in Q2 — Margins decline, tax incidence rises
Benchmarks may remain firm
Huge fund flow in commodity futures dangerous
PSBs divided over consolidation move
No unions please, say employees of top BPOs
Broadband base swelling; after-sales services lagging

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line