Non-Sensex cos to beat the biggies

RESULTS PREVIEW

f/032208_01.pdf">Click here for PERFORMANCE INDICATOR  Hundred-odd firms took part in the conference organised by Citigroup and Edelweiss. Of these, we have growth estimates of 94 firms for 2007-08 and 2008-09.  These companies are expected to post average sales growth of 22.93 per cent in 2007-08, considerably lower than 35.1 per cent achieved in 2006-07. The sales growth rate is expected to improve to 24.48 per cent in 2008-09.  The operating margins of the 94 firms are likely to be around 21.54 per cent in 2007-08 but will increase to 22.52 per cent in 2008-09. The operating profit growth rate in 2007-08 will be at 22.96 per cent as compared to 51.85 per cent in 2006-07. The growth will improve to 30.17 per cent in 2008-09.  The non-Sensex firms covered in this study are expected to show a decline in net profit growth rate in 2007-08 from 55.35 per cent in 2006-07 to 23.23 per cent. However, the profit growth rate is expected to increase to 37.1 per cent in 2008-09.  In 2008-09, companies posting growth will be from sectors such as housing, infrastructure, construction, IT, pharmaceuticals and metals.  The 11 infrastructure firms in the sample are expected to maintain revenue growth rate of over 50 per cent in 2007-08 and 2008-09.  The growth in operating profit would be a robust 62 per cent in 2007-08 and 67 per cent in 2008-09. The net profit of these firms will grow at a healthy 58 per cent in 2007-08 and a strong 75 per cent in 2008-09.  Unlike the four frontline software firms, the mid- and small-size technology firms are expected to fair well in 2007-08 and 2008-09.  Nine technology firms having interest in software education, software services and hardware will show revenue growth of 22.4 per cent in 2007-08, which will increase to 36 per cent in 2008-09.  The net profit for these companies is expected to grow from around 3 per cent in 2007-08 to 56 per cent in 2008-09.  In 2008-09, steel, aluminium and copper manufacturing firms will post marginal improvement in performance. Sterlite Industries and Steel Authority of India are expected to do well in 2008-09.  Medium-sized banks are expected to fair badly in 2008-09 with revenue growth likely to be trimmed from 30 per cent in 2007-08 to 22 per cent in 2008-09. Net profit is expected to decline sharply from 48 per cent in to 26 per cent.  Sales growth is likely to be slower at 37 per cent for capital goods firms in 2008-09 after over 59 per cent growth in revenue in 2006-07 and an expected growth of 52 per cent in 2007-08.  Pharmaceuticals are expected to post revenue growth of 15.4 per cent in 2008-09. Their net profit is likely to grow by 17 per cent in the same financial year.