India Inc Q4 net sales up 6%, net profit down 3%

Moneylife Digital Team 24 June 2013

A Moneylife analysis of 1,144 companies found out that India Inc’s performance for the fourth quarter of the 2012-2013 fiscal was subdued

Corporate India has had a somewhat mixed fourth quarter results for the 2012-2013 fiscal. Moneylife analysed data of 1,144 companies, and saw that sales, operating profit and net profit were subdued, due to challenging market conditions and macro-economic headwinds. India Inc saw aggregate sales amount to Rs13,30,302.41 crore, up 6% year-on-year (y-o-y), when compared to Rs 12,54,576.28 crore recorded for the March

2012 quarter. Operating profit too crept up 6% y-o-y, from Rs 1,86,287.61 for the March 2012 quarter to Rs 1,97,750.58 for the March 2013 quarter. However, net profit slumped, during the March 2013 quarter, by 3%, to Rs1,11,524.35.

Corporate India’s margins remained more or less flat. Operating profit margins of India Inc, for the March 2013 quarter was 14.87%, marginally better than the 14.85% that it recorded in March 2012. Net profit margins dipped during the March 2013 quarter, from 9.15% to 8.38%. At the outset, these numbers are somewhat subdued, but it isn’t bad considering the dire macro-economic scenario that we have been witnessing since the beginning of the year.

A closer look reveals a much better picture. Out of the 1,144 companies, 60.22% reported improved net sales during the March 2013 quarter, when compared to the same quarter last year. Similarly, 48% of the universe reported improved operating profit. Only 43% of the companies saw net profit improve during the March 2013 quarter when compared to the March 2012 quarter. However, 45% (518) of the companies saw their net profit margin improve, while 544 or 47% of the companies saw their operating profit margin improve.

The global economic turbulence, the weakening rupee, are likely to affect the broader macro-economic picture in the first quarter of the 2014 fiscal. Even though commodity prices are on the decline, it is by no means positive because consumers still have to buy. With the Reserve Bank of India (RBI) keeping rates steady, it is unlikely that consumer spending will pick up pace, although selective companies may do well. Those dependent on a weaker rupee, such as information technology and automotive ancillaries, could do well.

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