'Early bird' results point to slowdown

Sales growth of 251 firms lowest in nine quarters.

India Inc's growth momentum appears to have slowed in the quarter ended September 2007 if "early bird" results are any indication.

The sales growth rate of 251 firms that have declared their results so far is 18.3 per cent, the lowest in nine quarters. Net profit growth at 28.6 per cent is the lowest in four quarters. 
 

EARLY BIRDS, FEW WORMS
	Quarter ended (Rs cr)
	Sep'06	Sep'07	% chg
Net sales	92,719.00	109,709.00	18.30
Other income	5,111.00	6,480.00	26.80
Interest	11,674.00	16,531.00	41.60
Net profit	12,352.00	15,889.00	28.60
No of cos: 251

The lower sales growth rate is on account of single-digit growth in sales by Reliance Industries (6.3 per cent), Reliance Energy (9.53 per cent), Hero Honda (5.48 per cent) and Biocon (7.52 per cent).

Companies that posted a decline in sales included two-wheeler giant Bajaj Auto (- 3.03 per cent), pharmaceutical major Ranbaxy (-4.79 per cent) and Madras Aluminium (-11.13 per cent).

Net profit margins rose from 13.32 to 14.48 per cent, thanks mainly to 59 firms that more than doubled their net profit. Of 251 early birds, 157 reported a rise in net profits while 53 posted a decline.

Big-ticket companies performed reasonably well with Reliance Industries, Reliance Energy, GAIL, ICICI Bank, HDFC Bank and GE Shipping recording a net profit over 25 per cent.

Twenty-six firms posted losses and 10 became profitable again from losses in the corresponding previous quarter.

Information technology (IT) and two-wheelers were the laggards. IT firms have posted a revenue growth rate of around 22.2 per cent but net profit growth has slipped below 19.86 per cent.

The "Big Three" of the sector "" TCS (23 per cent), Infosys Technology (20 per cent) and Wipro (14 per cent) "" posted their lowest net profit growth in the last four quarters.

For two-wheeler companies, growth in sales and profits has been flat.

Petrochemicals, sponge iron and pharmaceuticals did better during the quarter and reported a net profit of over 70 per cent, while five cement firms reported a 37 per cent rise in net profit.