Cos post 13 rise in Q1 profits

MUMBAI, Aug 20: The corporate sector is doing well in the current year if the profitability of companies in the first quarter is any indi...

MUMBAI, Aug 20: The corporate sector is doing well in the current year if the profitability of companies in the first quarter is any indication. A study of the financial performance of 333 companies has shown a significant 13 per cent rise in net profits during the first quarter Q1 of 1999-2000, hinting at a possible industrial recovery.

The study, conducted by the Industrial Development Bank of India IDBI, covers non-financial companies engaged in manufacturing and service industries. The net sales of the sample companies went up by 10.8 per cent to Rs 2,94,37.3 crore in Q1 of 1999-2000 from Rs 2,65,58.1 crore in the corresponding period of last year. The net profit of sample companies rose by 13.0 per cent to Rs 1221.5 crore from Rs 1080.8 crore.

quot;Their total income increased by 10.9 per cent to Rs. 3,01,219 crore from Rs. 2,71,60.9 crore while the cost of production too jumped 10.9 per cent from Rs. 2,26,391 crore to Rs. 2,51,15.9 crore. Interest expenses went up by 7.3 per cent. However, theshare of interest expenses in total cost structure including interest declined marginally from 7.8 per cent in Q1 1998-99 to 7.6 per cent in Q1 1999-2000,quot; IDBI said.

Out of 333 sample companies, 243 companies earned profit during Q1 1999-2000. Meanwhile, the report added that of the 32 industry groups, 26 groups recorded positive sales growth.

quot;The cotton textiles-composite group recorded the highest growth 83.0 per cent, followed by petro-products 65.3 per cent, motorcycles and scooters 42.9 per cent, cables 36.8 per cent, electronics 30.8 per cent, auto-accessories 28.0 per cent, other food products 26.7 per cent, fertilisers 23.3 per cent, miscellaneous-others 20.4 per cent, motor vehicles 20.0 per cent and paper and paper products 14.5 per cent,quot; the report said.

quot;Gross margin on sales for the sample companies during the first quarter of this fiscal, at 10.02 per cent, was higher than 9.81 per cent in the Q1 1998-99. In all, 17 industry groups recorded improved margins overthe previous year. Electricity generation and distribution 30.2 per cent, other textiles 15.7 per cent, electronics 15.1 per cent, non-metallic mineral products 14.3 per cent, aluminium, auto-accessories motorcycles and scooters etc. out-performed the sample average,quot; IDBI said.