f/052008_01.htm">(Click here for table) However, the growth in the operating profits has been the lowest at under 20 per cent. What's more, the net profit too has seen a far lower growth of under 20 per cent. Clearly inflation in commodities as also wages and salaries are denting operating profit margins (opm). For the same sample, the opm, at 19.4 per cent for the March 2008 quarter is the lowest in the last four quarters as is the net profit margin at 11 per cent.
Margins, it would appear are getting crimped across sectors. Check out this sample: oil and petrochem giant Reliance Industries, aluminium major Hindalco, car manufacturer Maruti, FMCG firm Hindustan Unilever, engineering company Siemens, steel maker JSW Steel, jewellery retailerTitan, cement producer ACC, textile company Raymond, logistics firm Gateway Distriparks and retailer Shoppers Stop. The more worrying cases are those where the margin pressures have resulted from lower top line growth; the shocker from BHEL which saw an increase in gross revenues of just 15 per cent, was followed by some weak numbers from ABB, which posted a sales growth of just 17 per cent. Slower execution appeared be a common theme with Siemens reporting an 86 per cent crash in the operating profit. India's biggest power producer NTPC's provisional numbers show that its net profit for Q4FY08 will actually fall post adjustments. Wall Street woes for TCS resulted in the tech major turning in only a 3 per cent sequential growth in revenues and a140 basis points fall in the ebit margin. Where high raw material costs are the culprit, there is little companies can do. All in all, the quality of earnings this time round has not always been up to the mark. A weak petrochem market meant Reliance Industries couldn't hold on to margins; they slipped 270 basis points. Consumers aren't buying cars
| FY08: MARGINALLY BETTER | |||
| (Rs crore) | 2006-07 | 2007-08 | %chg |
| Net sales | 7,67,261.44 | 9,17,058.97 | 19.52 |
| Other income | 20,556.08 | 31,358.82 | 52.55 |
| Interest | 13,385.69 | 16,369.98 | 22.29 |
| PBIDT | 1,56,027.10 | 1,97,079.10 | 26.31 |
| PBDT | 1,42,641.41 | 1,80,709.12 | 26.69 |
| Net profit | 87,695.03 | 1,15,752.42 | 31.99 |
| OPM (%) | 20.34 | 21.49 | |
| GPM (%) | 18.59 | 19.71 | |
| NPM (%) | 11.43 | 12.62 | |
| No of companies: 1246, excluding banks and finance companies | |||