As many as 2,431 firms in manufacturing and services sectors post their biggest-ever net profit decline of 42.45 per cent.
There are very few takers for B Ramalinga Raju's astounding claim that the margin earned by Satyam in the quarter ended September 2008 was just 3 per cent, and not 24 per cent as reported in the results.
Once criticised as inhibitory, India's strict regulatory norms have protected local banks from the global financial tsunami.
The global credit crisis has slowed order growth of Indian construction and engineering companies, indicating that several big projects, planned earlier, are being pushed back either for lack of capital, or because they have become unviable now.
The tide for Indian firms seems to be turning. As much as 41 per cent of companies announcing their second-quarter results have registered a drop in profit.
Sales of 137 firms up 29.7%, but operating margins dip.
After four years of growth at 40 per cent or more, capital expenditure (capex) by India Inc in the current financial year (2008-09) may drop almost 30 per cent.
The combined stake of foreign institutional investors in the top 500 Indian companies has dropped to a two-year low of 18.18 per cent as on June 30, 2008 from a high of 19.86 per cent in the corresponding period a year ago.
The high interest rate regime is unlikely to hit larger companies' ongoing projects, at least for now.
As a result, new projects may have to be put on the backburner.
Weighed down by a sharp rise in input costs and limited ability to pass on the burden to customers, India Inc's operating margins took a hard knock in the first quarter of 2008-09 even though demand was buoyant as reflected in zooming sales.
Analysis of data published by 1,074 manufacturing companies with turnover of at least Rs 1 crore (Rs 10 million)(shows they were sitting on unsold finished stock worth Rs 18,950 crore (Rs 189.5 billion) at the end of 2007-08, up almost 70 per cent from Rs 11,164 crore (Rs 111.64 billion) a year ago.
The market meltdown since its January 8 peak has made private investments in public equity (PIPE) unprofitable as 2007's deal size of $5.31 billion is currently valued at $5.29 billion.Of the seven deals in the real estate sector, five are profitable while two made losses. Similarly, of the 17 deals in manufacturing sector, 13 reported loss.
Early birds post better profit growth than the preceding two quarters.A total of 345 companies have so far declared their results. Analysis of the results of a common sample of 237 companies showed that the net profit growth at 21.97 per cent was better than that recorded in the previous two quarters
The fourth quarter (January-March) is usually a weak quarter for the Indian IT companies due to the lesser number of billing days. This time, however, the good news is that the rupee has depreciated by about 1.3 per cent during the quarter. Every increase/decrease of a percentage point in the rupee lowers/adds to the operating (EBIDTA) margins by 30-50 basis points (bps).
India Inc looks all set to grow at a slow pace in the current financial year. That is, if the financial performance of Corporate India for the first nine months of 2007-2008 is any indicator of things to come.
Report sees the index at 16,000 points in the worst-case scenario.
The rising cost of production and interest outgo have shrunk operating margins by 53 basis points to 15.16 per cent in the quarter ended December 2007, while net profit margin has slipped 39 basis points to 9.31 per cent as compared to 9.70 per cent in the corresponding quarter a year ago.
Short covering also took place in RNRL (futures up 22 per cent, OI down by 51.48 lakh shares), Reliance Energy (futures up 18.6 per cent, OI down by 57,750 shares) and NTPC (futures up 13.3 per cent, OI down by 25.11 lakh shares).
The market wide open interest declined by 15 per cent and is 25-30 per cent below the peak levels, indicating covering of long positions. The Nifty futures OI declined further by 19.5 per cent or 74.45 lakh shares. The current Nifty January OI of 30.97 million shares is the lowest for the current month series.
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