March quarter results: Cost pressures eat into robust revenues of mega-cap companies
Pratibha Kamath  and  N Madhavan 08 June 2011

For the March 2011 quarter, 107 mega-cap companies in the Moneylife sample recorded sales growth of 23% overall, but only an 11% growth in profit, due to rising costs

Mega-cap companies (defined as those with more than Rs10,000 crore market capitalisation) recorded a sales growth of 23% (aggregate sales Rs7,01,421.81crore, in the Moneylife sample). However, operating profit growth was 11% (aggregate operating profit Rs 1,20,284.48 crore), and net profit grew by 11% (aggregate net profit Rs73,323.99 crore). The Moneylife sample consists of 1,300 companies, of which 107 companies are mega-cap companies.

One of the high performers by revenue growth among the mega-cap companies was Yes Bank, with 71% growth (quarterly revenue Rs1,409.37 crore). Its operating profit growth was a robust 35% (quarterly operating profit Rs348.77 crore) and net profit growth was a stupendous 45% (quarterly net profit Rs203.38 crore).

Mangalore Refinery & Petrochemicals was one of the highest performers by operating profit which rocketed by 92% (operating profit was Rs864.86 crore) from a low base. Its sales growth was 43% (Rs12,414.43 crore) and net profit growth was 118% (Rs552.86 crore).

On the basis of net profit growth, Reliance Communications was a high performer with 117% (net profit Rs574.23 crore). The company's operating profit grew by 122% (operating profit Rs456.54 crore). However, this was simply because the March quarter profit last year was low. Indeed, in the first three quarters of last year it recorded losses. This is reflected in its revenue growth which was actually down by 6% for the March quarter.

Petronet LNG was an excellent performer by all the three parameters: sales growth was 67% (revenue of Rs3,985.97 crore), operating profit growth 74% (operating profit of Rs351.31 crore), and net profit growth 112% (net profit of Rs206.28 crore). Godrej Consumer Products was a similar robust performer on all three parameters: sales growth of 130% (revenue of Rs655.72 crore), operating profit growth 79% (operating profit of Rs131.03 crore) and net profit growth 75% (net profit of Rs110.58 crore).

The laggards among the mega-cap companies were Oil & Natural Gas Corporation (sales growth just 1%), Steel Authority of India (revenue decline of 1%), Reliance Capital (fall in operating profit by 58%) and Ranbaxy Laboratories whose operating profits collapsed into a loss in the March quarter.

ONGC recorded sales of Rs16,107.93 crore, operating profit of Rs7,972.28 crore (down 15%), and net profit of Rs2,790.86 crore (down 26%). Steel Authority of India recorded sales of Rs12,130.38 crore, operating profit of Rs2,204.64 crore (down 29 %), and net profit of Rs1,507.12 crore (down 28%).

Reliance Capital had revenues of Rs733.85 crore (up 33%), operating profit of Rs50.22 crore (down 58%) and net profit of Rs112.37 crore (up 33%). Cadila had sales of Rs695.55 crore (up 22%), operating profit of Rs100.82 crore (down 32%) and net profit of Rs89.76 crore (down 31%). Ranbaxy had sales of Rs1,095.81 crore (down 43%), operating loss of Rs76.59 crore and net loss of Rs52.91 crore.

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