|
Rate of growth in 2004-05 |
|
In per cent |
Sales |
Cost of raw
material |
Net profit |
|
Steel |
38.78 |
41.31 |
154.89 |
|
Tea |
16.27 |
33.33 |
150.55 |
|
Ferro alloys |
28.99 |
40.07 |
142.36 |
|
Engineering |
31.05 |
38.27 |
100.05 |
|
Chemicals |
34.97 |
44.22 |
84.05 |
|
Automobile-cars |
19.42 |
23.04 |
80.55 |
|
Steel - HR/CR |
65.84 |
71.28 |
79.64 |
|
Auto ancillaries |
23.02 |
26.76 |
77.51 |
|
Electrical equip |
19.6 |
23.17 |
71.63 |
|
Fertilisers |
19.66 |
24.95 |
53.88 |
| |
| Clearly, the oil marketing companies dragged down the overall performance of Corporate India.
|
| |
| That's true not only for profits but for sales as well. Topline growth for the sample as a whole was 21.94 per cent, well below the growth of 23.97 per cent notched up by the manufacturing sector excluding oil marketing companies.
|
| |
| Oil marketing companies were hit because political considerations prevented a revision of their product prices, while the cost of their raw material, crude oil, rose sharply. With a 32 per cent rise in the cost of raw materials, the marketing firms reported a 33.5 per cent decline in their aggregate net profit despite a 21.94 per cent rise in sales.
|
| |
| The 1,246 manufacturing companies, including five refining companies in the sample, did extremely well despite raw material prices rising faster rate than the increase in sales. In spite of a 27.68 per cent rise in the cost of raw materials compared to a sales growth rate of 23.97 per cent, net profit surged by a hefty 54.5 per cent. This shows that these companies could pass on the rise in costs to their consumers.
|
| |
| The oil marketing companies, on the other hand, were hit hard with net profit of BPCL, IBP, HPCL and Indian Oil Corporation declined between 30 and 73 per cent.
|
| |
| But refiners like Reliance Industries, Bongaigaon Refinery, Chennai Petroleum, Kochi Refineries and MRPL posted over 50 per cent rise in net profit on the back of 41 sales growth.
|
| |
| Of the 97 manufacturing sectors studied here, the raw material cost of as many as 66 sectors moved ahead of its rate of growth in sales.
|
| |
| However this affected the net profits of only 16 sectors which showed a decline in net profit despite rise in sales. The sectors, apart from oil marketing companies, which are most affected on account of the rise in raw material costs are the ones which used steel, chemicals and coal as raw material. |
| |
