The March quarter saw net sales of nearly 2,900 companies declining by 1.3 per cent and net profit plunging 27.1 per cent, Care Ratings has said, despite brokerages lapping up the "stellar performance".
The quarter was better as on a year-on-year basis, topline of these companies declined 6.9 per cent while bottomline saw a negative 11.4 per cent growth in the year-ago period, the Care Ratings report said today.
"The performance of 2,896 companies in the March quarter does not reveal a positive picture, being marred by negative growth in net sales and profits. Net sales declined 1.3 per cent on top of negative growth of 6.9 per cent a year ago and their net profit declined 27.1 per cent over a negative 11.4 per cent in the previous year," the agency's Chief Economist Madan Sabnavis said in the report.
The report does not include companies in the banking and finance, oil and gas as well as IT sectors due to regulated mandated massive provisioning, lower oil prices and currency fluctuations.
Inclusion of these companies would have seen net sales growing by 2.2 per cent in the reporting period as against 3.8 per cent a year ago while net profit plunged 30.8 per cent compared to a negative 5 per cent a year ago, Sabnavis said.
The 170 companies in the size range of sales of above Rs 1,000 crore each constituted 67.3 per cent of total sales of sample companies and dominated the overall performance.
The next two ranges of Rs 500-1000 crore and Rs 250- 500 crore net sales contributed 13.5 per cent and 8.1 per cent, respectively. Top 519 companies with sales of over Rs 250 crore each accounted for 89 per cent of the total sales during January-March.
The largest sized companies witnessed the highest growth in sales of 3.1 per cent, followed by those in the Rs 250-500 and Rs 500-1,000 revenue ranges at 1.2 per cent and 1.1 per cent, respectively, while those with under Rs 250-100 crore in sales saw negative sales growth.
Net sales of companies in the Rs 100-250 crore range
declined from Rs 50,923 crore in March 2015 quarter to Rs 50,880 crore in the March 2016 quarter while those with net sales of under Rs 100 crore dropped from Rs 45,139 crore to Rs 39,668 crore, Sabnavis said.
Interestingly, the largest companies after locking in highest net sales did not fare the same in terms of net profit. Companies with over Rs 1,000 crore of sales recorded second lowest growth in profits at 2.5 per cent with their profit rising from Rs 51,100 crore in March 2015 to Rs 52,399 crore in March 2016.
Net profit of those companies in Rs 500-1,000 crore bracket rose 64.9 per cent in March 2016 as against a negative growth of 66.9 per cent in March 2015. In absolute terms, net profit rose from Rs 4,614 crore in March 2015 to Rs 7,610 crore in March 2016. This, however, was nearly half of what they had reported in March 2014 at Rs 13,920 crore.
Companies in the Rs 100-250 crore topline saw the sharpest negative growth of 251.6 per cent in the reporting quarter.
