About 500 leading private companies have almost doubled their profits to Rs 10,154 crore (Rs 101.54 billion) in first half of 2004-05 after financial institutions like IDBI took a number of measures including cut in lending rates and debt restructuring in the last few years.

India, Inc. improved its financial health and profit margins drastically to become more competitive in the first half of this fiscal. Assisted by IDBI, the top 500 companies posted 28 per cent growth in sales at Rs 1,41,546 crore (Rs 1415.46 billion) in first half of 2004-05, according to industry sources.

The income of these companies rose 28 per cent to Rs 1,45,265 crore (Rs 1452.65 billion) while their cost of production was up 26 per cent to Rs 1,18,519 crore (Rs 1185.19) till September 2004.

Even after taking higher loan amounts, the companies restricted their interest outgo to Rs 5,736 crore (Rs 57.36 billion) in first half of 2004-05, which is marginally higher than Rs 5,573 crore (Rs 55.73) in the same period last fiscal.

As a result of prudent debt management and lower interest payments, the companies increased their profit before tax by 81 per cent to Rs 14,187 crore (Rs 141.87 billion) till September.

The net profit of these 500 companies grew 87.2 per cent to Rs 10,154 crore in the first half of 2004-05. The average net margin of the 500 companies increased to 7.2 per cent in the first half of 2004-05 from 4.9 per cent in the year-ago period.

The average gross margin of the sample companies recorded a modest increase from 17.5 per cent during H1 last fiscal to 19 per cent in H1 2004-05.

The impressive increase in profit was mainly due to considerably better working results of units in industries such as iron and steel, artificial fibres, cement, fertilisers, sugar, electricity generation and cotton textiles.