India Inc is firing on all cylinders. The performance of 175 companies that have announced their results so far for the fourth quarter of 2005-06 has been spectacular: 40.9 per cent rise in net profit and 23.39 per cent rise in sales.
Information technology, cement and capital goods firms have shored up the fourth quarter performance, cornering 50 per cent share in sales and 65 per cent share in net profit.
A common sample of 138 companies in the corresponding quarter of the previous year had shown a 28.5 per cent rise in net profit and 37.39 per cent sales growth.
Profit margins of these 175 companies went up handsomely by over 200 basis points (one basis point is one hundredth of a percentage point) while operating margins moved up 236 basis points to 25.51 per cent.
Their gross profit margin climbed 259 basis points to 23.95 per cent and the net profit margin rose 206 basis points to 16.64 per cent.
Other income of these companies has increased significantly (up 103.22 per cent), accounting for 19.43 per cent of the pre tax profit. The operating profit has increased 35.99 per cent and gross profit by 38.36 per cent while the interest cost moved up by 7.66 per cent.
Within this group, sales of 28 IT firms were up 46.55 per cent and net profit moved up 53.31 per cent. Three cement companies aggregated sales growth of 27.34 per cent and their net profit increased by 74.34 per cent. Four capital goods firms posted sales growth of 42 per cent and their net profit increased by 57.91 per cent.
The available results indicate that sugar, fertilisers, shipping, construction, bearings, telephone cables, engineering and cotton textiles firms are likely to show robust fourth quarter performance. Largely in line with market expectations, steel, power, manmade fibers, and pesticides firms have not done well.
So far, seven Sensex companies - Wipro, TCS, Infosys Technologies, ACC, Satyam Computer, Gujarat Ambuja Cement and Ranbaxy Laboratories - have announced their fourth quarter results. Wipro, TCS, Infosys Technologies and Satyam Computer have collectively accounted for 33 per cent of sales and 44 per cent of net profit of the sample companies.
ACC's sales and net profit were up 19.24 per cent and 42.27 per cent, respectively while Gujarat Ambuja Cement posted 38.49 per cent rise in sales and 108.64 per cent rise in net profit indicating better fourth quarter performance for the cement sector. Ranbaxy Laboratories disappointed posting 6.7 per cent decline in sales and 25.8 per cent decline in net profit.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
