Heavyweights’ quarterly show holds out hope for Street

Telecom player Idea Cellular’s numbers fell short of expectations

Written by ENS Economic Bureau | New Delhi | Published: July 24, 2012 1:21:52 am

After a string of disappointments,corporate heavyweights on Monday turned in encouraging numbers for the three months to June,2012,with Larsen and Toubro beating the Street and Hindustan Unilever putting up a good show with the domestic consumer business growing 19 per cent y-o-y. Telecom player Idea Cellular’s numbers,however,fell short of expectations both on the revenue and profit fronts.

While L&T’s significantly higher order inflows could be a sign that investment is picking up,some of it related to spillovers from the March,2012,quarter. HUL’s volume growth of 9 per cent y-o-y however,indicates that the consumption story isn’t over yet. Idea’s weak performance reflects the keen competition in the sector which is limiting pricing power.

Engineering major L&T reported a strong growth in its bottom line to Rs 864 crore,driven by a big jump of 26 per cent y-o-y jump in revenues to Rs 11,955 crore. Adjusted for forex losses,operating profit margins came in a strong 11.8 per cent. At Rs 19,594 crore,the order book at L&T for the three months to June grew a smart 21 per cent y-o-y, meeting analysts’ expectations and taking the order book to Rs 1.53 lakh crore at the end of June,a 12 per cent y-o-y increase.

Net profits after tax and before exceptionals at consumer goods major Hindustan Unilever (HUL) came in at Rs 855 crore,an increase of 48 per cent y-o-y,on the back of a fairly good rise in sales of Rs 6,250 crore,up 12 per cent y-o-y.

Idea Cellular’s consolidated profits fell sequentially to Rs 234 crore although net sales were higher at Rs 5,502 crore. The management attributed the drop in net profit to the slide in the ARPM (average revenue per minute) as also some regulatory overhang. FE

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