Early birds post 84% rise in Q3 net profit

Sales of 80 companies climb 43%, operating profit margins up at 28%.

The early birds have set a scorching pace in the quarter ended December 2006 with around 80 companies posting a 43.5 per cent rise in sales and a hefty 84.8 per cent rise in net profit.

The healthy performance so far is from sectors like software services, engineering, construction, capital goods and non-ferrous metals.

Operating profit margins are also healthy, increasing by 490 basis points at 28.08 per cent over the corresponding period last year. (One basis point is one hundredth of a percentage point.)

Other income has increased by 178 per cent but that has not unduly impacted the margins. Excluding other income, which accounts for 6.26 per cent (3.91 per cent) of the operating profit, operating margins are up 404 basis points at 26.33 per cent. 
 

MONDAY'S SCORECARD Quarter ended December 2006
	Sales		Net profit
	Rs cr	%	Rs cr	%
TCS	4,873.44	49.30	1,116.10	49.00
Rajesh Exports	1,872.45	44.70	28.12	57.70
HCL Tech	1,465.10	39.00	286.20	58.00
Container Corp	747.20	17.50	165.64	21.10
Triveni Engg	307.01	4.80	21.89	-5.40
IPCL	3,056.00	26.70	405.00	77.60
Dalmia Cement	262.76	66.30	64.84	453.20
South Indian Bank	248.95	28.30	24.84	20.30
Tulip IT Services	221.98	64.40	27.48	131.50

Interest cost continues to be a major concern and has gone up by 18.71 per cent. The depreciation provision is up by a modest 14.2 per cent while the tax provision has gone up by 120 per cent. The tax provision now accounts for 20.31 per cent of the pre-tax profit compared with 17.61 per cent in the same period last year.

TCS, which announced its third-quarter results today, has done marginally better than Infosys by posting a 49.25 per cent rise in consolidated sales compared with 44.35 per cent by Infosys.

However, growth in net profit for both was healthy at over 49 per cent each. The operating margins for TCS were almost flat at 29.3 per cent while Infosys posted a 118 basis point decline in year-on-year margins at 31.56 per cent.

Other infotech companies that declared their results today have also done well. While Geometric Software's net profit has gone up by 168 per cent, HCL Technologies posted a net profit of Rs 286 crore for the second quarter ended December 31, 2006, a 58 per cent rise from the corresponding period last year.

Old economy firms were also not far behind. Indian Petrochemical Corporation Ltd posted a 40 per cent jump in net profit to Rs 405 crore for the quarter ended December. Its turnover during the quarter was up 9.7 per cent to Rs 3,459 crore.

Among the 80-odd firms, Atlanta, Hindustan Zinc, KEC International, S Kumar's Nationwide, Tulip IT Services, Praj Industries and Madras Aluminium posted over 100 per cent rise in net profit.

Other noteworthy performers include IPCL, Jaiprakash Associates, CMC, Supreme Industries and i-gate global.