Top line jitters for early birds

Net profit of 154 firms goes up 37%, sales growth slumps to 17%.

India Inc's first quarter scorecard has been mixed so far. While net profit growth has shot up, the 154 companies that have declared their results have faltered on the turnover growth rate.

Net profit has grown 36 per cent in the first quarter ended June 2007 compared with 29.44 per cent a year ago.

But the sales growth rate has slumped to around 17 per cent from 31 per cent in the same period last year.

Profit margins, however, have posted a robust growth. Operating profit margins have gone up from 20.14 per cent to 22.82 per cent in the same period and gross profit margins have increased by 239 basis points to 19.99 per cent. 
 

SKEWED PICTURE
Rs Crore	Jun-06	Jun-07	% Chng
Sales	29917.47	34868.83	16.55
Other Income	778.68	1567.67	101.32
OP	6023.93	7956.41	32.08
Interest	759.02	986.72	30.00
Gross Profit	5264.91	6969.69	32.38
Depreciation	854.92	996.78	16.59
Tax	868.68	1116.01	28.47
Net Profit	3507.18	4801.81	36.91
OPM %	20.14	22.82
GPM %	17.60	19.99
NPM %	11.72	13.77

Net profit margins have improved 205 basis points to 13.77 per cent.

Buoyed by a 101 per cent rise in other income, a few companies such as Jubilant Organosys, Petronet LNG, Zee Entertainment, Bayer Corp Science and Finolex Industries have doubled their net profit growth.

Analysts said it was too early to predict the overall picture as the 154 early birds belong to only four sectors "� software, two-wheelers, construction and fertilisers.

Initial estimates, however, suggest that telecommunications and capital goods will shine once again, with aggregate profits rising by over 85 per cent and 44 per cent, respectively.

Engineering firms are also expected to do well on the back of robust order-books. The fast moving consumer goods companies may also record a double-digit growth in revenues on account of the rise in product prices during the quarter.

The impact of rising interest rates will hit the profits of automobile companies, while the rupee appreciation is set to spoil the party for metals and software companies.

Cement companies, analysts said, were bound to feel the heat of their inability to raise prices.