Slowdown hits Q3 advance tax collections

The advance tax collection from India Inc. for the 3rd quarter were more or less flat, suggesting that the slowdown is impacting the companies' bottomline. This also rendered the targeted tax collection set by the govt. for Mar 31, 2012 a difficult target to achieve.

While ONGC paid the highest advance tax for Q3, it was IT major TCS that saw the maximum hike in its advance tax payout for Dec 2011. The usual major tax payers like RIL, SBI, Tata Motors and M&M, among others, made lower payments this time around.

Advance taxes from the FMCG sector were very encouraging, with HUL, ITC and Godrej Consumer Products posting a healthy growth in their respective outgo. Ditto was the situation with the cement sector, where Ambuja and ACC saw a magnificent rise in their advance tax payments.

Amongst the banking pack, while HDFC Bank, Axis Bank, Kotak Mahindra Bank and YES Bank did well, others like SBI, Dena Bank,
Central Bank, Union Bank and Bank of India disappointed on the advance tax front. It seems that the PSU banks may face some pressure in the coming quarters. ICICI Bank saw its advance tax outgo remain unchanged.

The pharma companies also seem to have fared well, judging by the initial tax outgo reported by Cipla, Pfizer and Novartis respectively.

Among the initial auto numbers, Hero MotoCorp and Bajaj Auto have done well, indicating a good run for the 2-wheelers. On the other hand, the disappointment shown by the tax outflow of M&M and Tata Motors has thrown up some concerns in the 4-wheeler segment. In fact, Tata Motors saw its advance tax outgo dip sharply by 93% to Rs 80 cr on a YoY basis.

The list of companies that have made no advance tax payout this quarter include the state-run oil marketers such as Indian Oil, Bharat Petroleum and Hindustan Petroleum.

Advance Tax (Oct-Dec 2011)
Particulars	Q3FY12	Q3FY11	% Change	Particulars	Q3FY12	Q3FY11	% Change
ACC	95	40	137.5	ITC	910	790	15.2
Alok Ind	320	350	-8.6	Kotak Mahindra Bank	150	80	87.5
Ambuja Cement	115	60	91.7	LIC	1200	1050	14.3
Asian Paints	130	100	30.0	Mahindra & Mahindra	220	230	-4.3
Axis Bank	662	540	22.6	Novartis	20	18	11.1
Bajaj Auto	450	370	21.6	NSE	39	39	0.0
Bank of India	100	150	-33.3	NTPC	830	1000	-17.0
Castrol	70	80	-12.5	Nuclear Power Corp	165	95	73.7
Central Bank	100	180	-44.4	ONGC	2924	2742	6.6
Cipla	90	70	28.6	Oracle Fin	45	50	-10.0
Crompton Greaves	62	78.5	-21.0	Pfizer	30	25	20.0
Dena Bank	65	80	-18.8	RIL	1002	1190	-15.8
GCPL	40	15	166.7	SBI	1730	1850	-6.5
GIC	135	130	3.8	Siemens	70	120	-41.7
Glaxo Pharma	80	90	-11.1	Star India	15	10	50.0
HDFC	475	400	18.8	Tata Chemicals	70	55	27.3
HDFC Bank	900	750	20.0	Tata Motors	80	1190	-93.3
Hero MotoCorp	180	120	50.0	Tata Power	80	60	33.3
Hindustan Zinc	400	325	23.1	Tata Steel	1100	1000	10.0
HSBC	420	200	110.0	TCS	550	220	150.0
HUL	300	220	36.4	Union Bank	220	350	-37.1
ICICI Bank	450	450	0.0	Yes Bank	160	120	33.3
IndusInd Bank	120	110	9.1	Zee Ent	40	40	0.0

Advance tax payment is a reflection of the health of the companies and the economy, which provides valuable cues towards the expected profitability going forward. With this latest set of advance tax data, one can conclude that the Dec 2011 quarter will be more or less a continuation of the weak performance we saw in the previous quarters, if not worse. While the IT and pharma companies are expected to do well as a result of the favourable business environment that they find themselves in today, others like metals, auto, oil & gas and banks may face some pressures ahead.