The performance of large companies with a paid-up capital of Rs 25 crore and above was better than the small companies in the first half of the current fiscal.
According to a Reserve Bank of India (RBI) study on the financial performance of 1,209 non-financial, non-government public listed companies, the sales of the top 203 firms rose by 3.7 per cent, while their total expenditure rose at a lower rate of 3 per cent.
According to the study, very large companies appeared to control the growth in expenditure, which was not the case with those in other size classes.
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For companies with a paid-up capital between Rs 15 crore and Rs 25 crore, sales rose only by 2.7 per cent. The growth in their total expenditure was at 3.4 per cent, which exceeded that of sales.
The expenditure growth for the next bracket of companies with a paid-up capital between Rs 10 crore and Rs 15 crore was also more than the sales -- sales rose by just 0.9 per cent with expenditure growth at 1.4 per cent.
Sales of smaller companies with paid-up capital less than Rs 1 crore, however, declined by 1.6 per cent during the first half.
According to RBI, companies in the size class of 'Rs 25 crore and above' registered a growth of 12.8 per cent in their post-tax profits during the first half of the year. The companies in the lower size classes, recorded substantial decline in post-tax profits of 18.9 per cent - 35.8 per cent. However, companies in the 'Rs 1 crore to Rs 5 crore' size class, registered a rise of 17.8 per cent in post-tax profits.
The interest cost of sales for all the companies slightly declined or remained same and varied between 3.5 per cent and 5.1 per cent during the half-year under review.
The interest cost of sales for companies in the size class of 'Rs 25 crore and above' was marginally lower at 4.8 per cent for the period compared with 5 per cent in the corresponding half of the previous year.
The interest burden for companies in the lower size classes was at the higher level in the first half of 2001-02, compared with that in the same period of the previous year. The interest burden for very large companies with paid-up capital of Rs 25 crore and above eased to 38.7 per cent, compared with 41.4 per cent in the first half of fiscal 2001. In the case of companies in the size group 'Rs 15 crore to Rs 25 crore' the interest burden rose from 39.7 per cent to 43.4 per cent.
The RBI study shows that the financial results showed a discernible slowdown in the performance of the private corporate sector during the first half of 2001-02, as indicated by a steep decline in the growth in sales and profits. Sales of the 1,209 companies posted a rise of 3.2 per cent in the period to Rs 1,80,257 crore. The total expenditure increased by 2.9 per cent to Rs 1,56,283 crore - at a rate slightly lower than the sales. The interest payments rose by just 1 per cent to Rs 8,449 crore. Profits rose by 4.1 per cent to Rs 9,435 crore.
Of the 1,209 companies covered in the study, 836 companies reported post-tax profits in the first half of fiscal 2002, compared with 888 companies in the corresponding period of the previous year.