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India Inc blazes into last quarter

Ashok Divase, Deepak Korgaonkar in Mumbai | February 03, 2004 09:36 IST

Sales of manufacturing and services companies grew 17 per cent in the quarter ended December 2003 from the same quarter a year ago. Net profits grew 53 per cent during the quarter, the best performance in the last three quarters.

An analysis of the quarterly performance of 1,500 companies shows sales growing 16.75 per cent to Rs 2,47,613 crore (Rs 2,476.13 billion), making the December quarter the fifth consecutive quarter of 15 per cent-plus growth.

The buoyancy in profit growth continued with these 1,500 companies posting 53 per cent growth to Rs 18,131 crore (Rs 181.31 billion).

Thus, this is the sixth quarter in a row when corporate profits have grown at over 45 per cent.

The net profit margin at 7.32 per cent has been the highest since the publication of quarterly results from June 1997.

Operating profit margins of these companies increased from 14.80 per cent in the quarter ended December 2002 to 15.70 per cent in the December 2003 quarter and the gross profit margin from 11.68 per cent to 13.47 per cent.

However, interest cover rose from 3.94 times to 5.65 during the period.

The results show sales and profits growth rates have spread across sectors. Of the 111 sectors classified by the BS Research Bureau, as many as 51 posted sales growth of over 17 per cent. The net profit of 32 sectors increased over 53 per cent while 12 sectors posted a turnaround during the quarter.

Of the sample of 1,500 companies, nearly 42 per cent (619 companies) have posted sales growth of over 17 per cent. The net profit of 31 per cent of the sample (460) increased over 53 per cent.

The operating profit margin of 545 firms was over the average growth of 15.70 per cent. Another 470 companies posted a net profit margin in excess of the sample average of 7.32 per cent.

The composite steel firms continued their dream run with six companies posting sales growth of 27 per cent and net profit growth of 700 per cent. The information technology sector has maintained its growth during the quarter with a 19 per cent sales growth and a 27 per cent net profit growth.

Sectors that more than doubled net profit include refineries, automobiles, non-ferrous metals, solvent extraction, engineering, shipping, steel tubes, steel alloys ceramics, housing construction and leather.

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