India Inc's quarterly profit registered its biggest drop since the stock market regulator made it mandatory for firms to announce quarterly results in March 1998.
Sales of 137 firms up 29.7%, but operating margins dip.
The results of quarter ended December 07 are less impressive than the corresponding quarter last fiscal. However, it is premature to conclude about the overall performance of companies.
The software sector has once again underlined its importance to the country by accounting for more than half of the total jobs created by Indian industry in the last financial year.
Till 15 days ago, only two PSUs - Oil and Natural Gas Corporation (ONGC) and National Thermal Power Corporation (NTPC) - ranked amongst the five most valuable companies. But with two more PSUs, Mineral and Metals Trading Corporation (MMTC) and National Mineral Development Corporation (NMDC), seeing sustained rise in the last three months, the number has risen to four.
The lower sales growth rate is on account of single-digit growth in sales by Reliance Industries (6.3 per cent), Reliance Energy (9.53 per cent), Hero Honda (5.48 per cent) and Biocon (7.52 per cent). Companies that posted a decline in sales included two-wheeler giant Bajaj Auto (- 3.03 per cent), pharmaceutical major Ranbaxy (-4.79 per cent) and Madras Aluminium (-11.13 per cent).
India ranks second in capital market inflows and fourth in merger and acquisition deals in Asia Pacific (including Japan), as deals worth $65.033 billion were reported in the first eight months of calendar 2007.
India Inc's first quarter scorecard has been mixed so far. While net profit growth has shot up, the 154 companies that have declared their results have faltered on the turnover growth rate.
Rising interest rates and higher inputs costs seem to have taken the sparkle out of corporate results in Q4 2007.
The early birds have set a scorching pace in the quarter ended March 2007, with around 120 companies posting a 28.6 per cent rise in sales and a hefty 57.8 per cent rise in net profit.
Open interest, the carry-forward position of stock market participants, increased by Rs 18,000 crore (Rs 180 billion) -- nearly 50 per cent -- in the first six days of the December contract, whose trading began on the first day of this month.
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