Best profit growth in 14 quarters

Four oil marketing companies "" Indian Oil Corporation (IOC), Hindustan Petroleum (HPCL), Bharat Petroleum (BPCL) and IBP "" have lifted the profit growth rate of India Inc to a 14-quarter high of 46.40 per cent.

Excluding these four firms, the profit growth rate of the other 1,806 companies that have announced their quarterly results so far comes down to 33.73 per cent.

These four oil marketing companies have collectively recorded 610 per cent growth in net profit during the quarter ended September 2006, riding high on declining crude oil prices.

Companies have posted robust performances with the sales growth rate of 1,810 firms, hitting an all-time high of 30.71 per cent.

With the operating margin rising by 154 basis points in this quarter over the quarter ended June 2006 and 84 basis points over the quarter ended September 2005, operating profits of sample firms have shot up by 36.66 per cent.

One basis point is one hundredth of a percentage point.

The profits and sales growth rates of corporate India in this quarter look spectacular against the backdrop of an 18.33 per cent rise in net profit in the corresponding quarter last year.

The net profit of listed entities had declined by around 3 per cent during the quarter ended December 2005 but moved up by around 20 per cent each during the quarters ended March and June 2006.

In the second quarter of the current financial year, the net profit of around 600 companies (33 per cent) rose by more than 50 per cent each. In fact, 325 firms have shown a net profit growth of over 100 per cent.

Around 400 companies (22 per cent) have recorded over 50 per cent growth in sales.

Overall, 158 companies have posted over 100 per cent sales growth.

Of the 122 sectors to which these 1,810 firms belong to, 23 have posted profit growth of over 100 per cent each, while profits of another 23 sectors have risen between 55 per cent and 99 per cent.

Oil marketing, software, cement, telecommunications, aluminium, diversified, textile spinning and weaving, diamond and jewellery, construction, non-ferrous metals, automobiles (tractors), organic chemicals and steel products firms have been the main drivers of India Inc's profit growth.

While oil marketing firms have stolen the show, the refineries have disappointed with a marginal decline in net profit on sales growth of 27 per cent.

Airlines, with a net loss of Rs 55.13 crore, was the only sector that slipped into the red, while sugar, engines, food products and a few others also recorded a decline in net profits during the quarter.

Automobiles (two-and three-wheelers), paints and personal care have also put up a bleak show with a modest 2-5 per cent growth in net profits.