Performance of Corporates in Q2 F 13

Performance of Corporate sector in Q2F13

 

The Analysis is based on the results of companies which have reported their results and the date of data taken here was as on 2^nd Jan for more than 4000 companies.

 

Sales: During quarter ended Sep.12 , Sales was at Rs.1290011 cr, 13% higher than the last year. YTD ( for 12 months trailing period ), it was at Rs.4875612 cr, a growth of 21.6% YoY. Other income during Q2F13 was at Rs.32435 cr, 24.6%  increase YoY. While till date other income was at Rs.113400 cr, 13.6% higher than the last year.

 

PBIDT : Operating profit margin was at Rs. 346728 cr (26.87% of sales), 28% higher than the last year in Q2. YTD it was at Rs.1179697 cr (24.19% of sales ), 17% rise YoY.

 

Interest cost ratio was at 12.95% of sales in Q2 while till date it was at 11.76% of sales. It used to be less than 10% a few years earlier and it has gone up in the recent past. The higher ratio is due to higher interest rates for borrowings.

 

PBT: Profit in Q2F13 was at Rs. 145842 cr, 46.9% growth YoY where as YTD basis it was at Rs.478323 cr, 3.3% drop over the last year.

 

The tax incidence was at 23.5% of Profit before tax which was lower compared to the trailing 12  months level of 26.9% indicating better tax planning and using tax set off by corporates to increase their after tax profits.

 

PAT: It witnessed 64% higher profit compared to the last year at Rs.111456 cr in Q2F13. YTD, profit was at Rs. 349196 cr, 4.1% lower than the last year.( previous 12 months ).

 

Profit margin was at 8.64% of sales in Q2 where as for 12 trailing months , it was at 7.16% of sales.

 

Cash profit during Q2F13 was at Rs.145293 cr, 11.26% of sales where as YTD it was at Rs.476900 cr, 9.78% of sales. The generation has improved by 150 bps on Sales. Many corporates are sitting on large cash surplus not investing in new projects and expansion due to general economic conditions. The lowered capacity utilization levels also had slowed down the pace of investment in new projects. Many of the sectors which were profitable two years back became unprofitable within a period of two years. Only when the prospects for the affected sectors improve , corporates will start investing in expansion and new projects.

 

Many of the corporates in India were able to pass on the inflation to the customers successfully which has resulted in good performance. Those who were not able to Pass on the entire cost increases to the customers witnessed the decline in profits.

 

The corporates which have borrowed funds from abroad through ECB’s expecting that Indian rupee would continue to be very strong , still have to recover from the depreciation of the rupee. Despite reporting good operational performance, some of the leading corporates reported losses on account of provision for rupee depreciation .