Early results set scorching pace

This year can be a good one for corporates, if the first quarter financial results are any indication.

The aggregate sales of the 105 companies that have announced their results so far jumped 56 per cent year on year, and the net profit increased 34.16 per cent in the first quarter of 2004-05.

In the corresponding quarter of 2003-04, the same companies reported stagnant sales and a 34 per cent rise in net profit.

As expected, lower interest rates and higher sales growth were the main drivers for the growth in the net profit of the companies. The interest burden also declined 17 per cent.

Picture of good health
No of firms 105	Quarter ended (Rs Crore)
	Jun-03	Jun-04	% Chg
Sales	11,576.03	18,080.47	56.19
Other income	144.00	121.25	-15.80
Operating profit	1,661.10	2,075.34	24.94
Interest	176.62	146.45	-17.08
Gross profit	1,484.48	1,928.89	29.94
Depreciation	342.51	349.83	2.14
Tax	270.64	383.91	41.85
Net profit	866.07	1,161.94	34.16
OPM (%)	14.35	11.48	-
GPM (%)	12.82	10.67	-
NPM (%)	7.48	6.43	-

The aggregate net profit of the early birds increased 34 per cent, from Rs 866 crore (Rs 8.66 billion) in April-June 2003 to Rs 1,162 crore (Rs 11.62 billion) in the quarter ended June 2004. Sales zoomed 56 per cent from Rs 11,576 crore (Rs 115.76 billion) to Rs 18,080 crore (Rs 180.8 billion)

over the same period.

However, the growth in sales was largely driven by MMTC, which reported a 230 per cent rise in trading activity in the quarter ended June 2004. If MMTC is excluded, the sales growth rate comes down to an earthy 35 per cent.

Of the 104 companies, excluding MMTC, 38 posted more than 34 per cent growth in net profit, while seven reduced their losses during the quarter.

Sector-wise, cement, sugar and a few frontline technology companies posted handsome growth in their bottom lines, while fertlisers, hotel and steel companies reported a turnaround.

Infosys Technologies posted a 42 per cent increase in net profit to Rs 394.47 crore (Rs 3.94 billion), against Rs 278.12 crore (Rs 2.78 billion) during the same quarter last year.

The net profit of Shree Cement increased more than six-fold, from Rs 4.24 crore (Rs 42.4 million) in April-June 2003 to Rs 25.93 crore (Rs 259.3 million) in the first quarter of 2004-05.

Hero Honda Motors reported a 20 per cent rise in its net profit, from Rs 157.82 crore (Rs 1.58 billion) to Rs 190.07 crore (Rs 1.9 billion), while Kochi Refineries' bottom line fell 9.6 per cent to Rs 153.10 crore (Rs 1.53 billion) from Rs 169.30 crore (Rs 1.69 billion).