India Inc's super show has 40 stars

India Inc had a super first quarter, thanks largely to the performance of 40 companies. Excluding these performers, the net profit growth of the remaining 1,245 companies that have declared their results so far would have been a minuscule 2.53 per cent.

The top 40 profit-making companies have registered net profit growth of 57.52 per cent, and sales growth of 42.5 per cent in the first three months of the financial year.

As a result, the overall net profit of the 1,285 firms has risen 22.74 per cent, and sales, 28.26 per cent. Excluding the public sector oil companies, the firms have posted a 25.7 per cent rise in sales, and 30 per cent growth in profits.

Yet another reason for the better corporate show during the quarter ending June 2006 has been the base effect.

The sales and profit growth rates of India Inc in the corresponding quarter ending June 2005 was lower than those for the previous two quarters ending March 2005 and December 2004. On a relatively lower base, the growth rate has been impressive in the latest quarter.

Corporate India's net profit during the quarter ending June 2005 had risen by 15.68 per cent, sharply lower than the net profit growth rate of 38.17 per cent during the quarter ending March 2005, and 28.12 per cent in the quarter ending December 2004.

The higher base effect had curtailed the net profit growth rate to 2.70 per cent during the quarter ending December 2005, and 18.80 per cent for the quarter ending March 2006.

A BS research bureau analysis of quarterly results of firms shows that 36 to 40 of them have been driving India Inc's growth over the last few quarters. The list of these firms is not uniform, but eight common corporate entities have all along been leading the show.

They are Hindustan Zinc, NMDC, Bhel, Satyam Computer, Maruti Udyog, Wipro, Infosys Technologies and HDFC Bank.

Over the last eight quarters, these eight firms have outperformed the rest of corporate India in terms of net profit growth.

During the quarter ending March 2006, as many as 40 companies posted net profit growth of 90.20 per cent. Excluding them, there was a 13.7 per cent decline in net profit for the rest of the sample.