The financial performance of 670 companies, whose results are available till now, shows a 61.49 per cent growth in net profits for the quarter ended December 2002.

The previous best net profit growth rate of over 55 per cent was recorded in the quarter ended September 2002.

Sales have grown by over 10 per cent after a gap of five quarters. These 670 companies recorded sales growth of 15.72 per cent.

The net profit growth has come mainly from the sharp turnaround in old economy sectors like steel, cement, commercial vehicles, cotton textiles, dyes and dyes intermediates, tea and metallic packaging.

These sectors largely built on their performance in the second quarter (ended June 2002), aided of course by a price recovery.

The smart recovery by the old economy stalwarts was buttressed by the over 100 per cent net profit growth recorded in the refineries, pharmaceuticals, man made fibres and spinning sub-sectors within textiles, hotels, forging, electrodes and packaging sectors.

However, sectors such as telecommunication, aluminium, petrochemicals and sugar disappointed with a sharp decline in net profits during the quarter.

The hefty 15.72 per cent sales growth too came largely from the old economy companies. Sectors such as refineries, steel (hot and cold rolled steels), composite steels, steel strips, steels tubes, pharmaceuticals, manmade textiles, information technology, engineering, commercial vehicles, auto ancillaries, tyres, hotels, engines and alkalies showed a sales growth rate of over 20 per cent each during the quarter ended December 2002.

But again, sectors such as telecommunication, fertilisers, aluminium, shipping and food products showed a decline in sales, largely on account of lower prices and reduced demand.

Sectors such as lubricants, diversified, cement and cotton textiles showed modest sales growth rate of between 1 and  per cent.

The gross and net profit margins of the 670 companies improved by over 165 basis points each with gross profit margins moving up from 10.90 per cent during the quarter ended December 2001 to 12.55 per cent during the quarter ended December 2002.

The net profit margins increased from 4.24 per cent to 5.92 per cent in the same period.