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Q4 results reveal vertical divide among corporates

Samata Dhawade & Deepak Korgaonkar

The quarter ended March 2001 reveals a vertical divide in the corporate India's financial performance. Of the full sample of 908 private sector companies, whose results are available till Sunday, over 432 companies have outperformed the full sample average sales income growth of 5.81 per cent.

The remaining 476 companies have underperformed to pull down the aggregate average growth.

The sales income of 908 companies (full sample) has increased 5.81 per cent to Rs 514.49 billion and net profit has grown 18.96 per cent to Rs 27.53 billion during the quarter.

The sample excludes infotech companies, PSUs, NBFCs, banks and financial institutions to retain the essential dynamics of the manufacturing sector operating in a competitive environment.

The aggregate sales income of 432 companies increased 30.51 per cent to Rs 261.38 billion and net profit increased 47.37 per cent to Rs 16.43 billion. They accounted for 51 per cent of the aggregate sales and 64 per cent in terms of net profit of the full sample.

The remaining 476 companies reflect the pitiable state of the manufacturing sector during the quarter. Their aggregate sales income dropped 11.49 per cent to Rs 253.12 billion, while net profit was down by 11.24 per cent to Rs 9.31 billion.

Interestingly, the sample of 432 companies has been heavily weighted in favour of medium and small companies. Indeed, of the better-than-average performing companies, only nine firms have sales income above Rs 5 billion.

Another 54 companies have sales income between Rs 1 billion and Rs 5 billion. The rest have sales of below Rs 1 billion.

Surprisingly, among the 432 companies, 195 firms have surpassed the average sales income growth of 31.5 per cent of the infotech sector. These 195 companies had a sales income rise of 76.8 per cent and 106.34 per cent in net profit.

Meanwhile, Grasim Industries, that heads the chart of the fastest growing firms, have booked a 14.67 per cent increase in sales income and 204 per cent in net profit.

Sector counterpart, Gujarat Ambuja also fared well with a 17 per cent increase in sales and 32 per cent in net profit.

With a 46.35 per cent increase in sales, Hero Honda has outperformed even the infotech sector's average growth in terms of sales.

But, its net profit dipped 10 per cent during the quarter.

Pharmaceutical major, Ranbaxy Laboratories has recorded a 19.96 per cent increase in sales income due to a better export market. Exports account for nearly 50 per cent of the company's sales income.

Echoing the trend, sector counterparts like Cipla, Nicholas Piramal and Sun Pharmaceutical have also recorded a double-digit growth in sales income.

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