Sensex companies to hog Q4 limelight

The 30 companies whose stocks comprise the Sensitive Index of the Bombay Stock Exchange are expected to report 20 per cent growth in sales and 30 per cent in net profits in the fourth quarter ended March 31 this year, according to brokerage houses.

The sales of these companies grew much faster - 30 per cent - in each of the three previous quarters of 2006-07. The net profits grew 24 per cent in the first two quarters and 34 per cent in the third. 

Q4 growth expectations
	Motilal	JM Morgan	Merrill Lynch
Sales	18.75	19.94	24.28
Operating Profit	22.27	23.23	27.24
Net profit	27.50	29.68	30.11
* All figures are growth rates

The projections are based on the fourth quarter previews by JM Morgan Stanley, Merrill Lynch and Motilal Oswal Securities. According to Motilal Oswal, the Sensex companies are expected to report 18.8 per cent growth in sales and 27.5 per cent in net profit.

JM Morgan Stanley and Merrill Lynch both expect 30 per cent growth in net profits while they differ on the sales growth rates. JM Morgan expects sales to grow at 19.9 per cent, while Merrill Lynch estimates sales growth at 24.3 per cent.

All the three say that the growth drivers will be cement, capital goods, information technology, private banks and telecom companies. The growth laggards will continue to be refineries, two-wheelers, power and State Bank of India.

Pharmaceuticals companies are expected to report a mixed quarter. Dr Reddy's Laboratories and Ranbaxy are expected to come out with robust numbers, while Cipla is likely to post single-digit growth. Among companies dabbling in fast-moving consumer goods, ITC is expected to show 20 per cent growth in sales and profit. Hindustan Lever may post single-digit growth in sales and its net profit growth rate is expected to be between 15 and 20 per cent.

Two-wheeler companies have shown a sluggish trend in the last three months on account of low demand. With the sales realisation expected to be lower compared with the same period last year, Bajaj Auto and Hero Honda may show single-digit growth in sales and a decline in net profits.

The profit growth rate of cement companies is likely to be lower "" 40-50 per cent "" compared with over 100 per cent during the first three quarters. According to JM Morgan, ACC is likely to post lower growth in sales and profit compared with Gujarat Ambuja and Grasim.