Q2 FY13 - Results Analysis
11/29/2012 9:00 PM Thursday
We were the only one to call the bottom of the market bang on target. Ever since fresh economic reform was initiated, the markets have been on an upswing. Now, why do we have wave that flag all over again? Look at how India Inc has performed in the September quarter of 2012 and you would know why.
- Out of a total of 2125 companies (from groups ‘A’ and ‘B’) that we have considered, the sales of 1273 companies have increased, while those of 780 companies declined and those of 72 companies remained stagnant.
- Out of a total of 2125 companies (from groups ‘A’ and ‘B’) that we have considered, the net profit of 1114 companies has increased, while that of 968 companies declined and those of 43 companies remained stagnant.
- The interest cost for India Inc. (excluding that for banks and financial services) has increased by 25 per cent on a YoY basis and has actually declined by 7 per cent on a sequential basis. This comes as a respite as the interest cost was witnessing a rapid increase in the past few quarters.
- India Inc. sustained its margins in the September 2012 quarter at 18.43 per cent as compared to 18.44 per cent in September 2011. On the sequential front, however, the margins witnessed an upmove as compared to 17.97 per cent in June 2012.
- As expected, the depreciation cost has increased marginally by 3.37 per cent, indicating some improvement on the capex front.
- Private Banks, Pharmaceuticals, FMCG, Infrastructure and Cement were the star performers for the quarter.
- PSU Oil Marketing Companies like HPCL, BPCL and IOC have posted a strong financial performance in the September 2012 quarter as the government (60 per cent) and up-stream companies (40 per cent) shared the burden of fuel under-recoveries.
When we had analysed India Inc’s performance for the June quarter, we had categorically stated that the September quarter would turn out to be even better. And, it is not by any chance, but the sheer prowess of our cutting edge research which has seen us repeat our performance of being correct yet again. Corporate India has put up a very strong performance against all odds that it faced during the September quarter. Dismal industrial production numbers, higher inflation levels and a weaker Indian Rupee were spelling a rather bleak performance to come in from India Inc. However, the ground reality has turned out to be on exact lines of what we had predicted. Here are some of the broader indicators:
- Though at slightly lower levels than what it was during the preceding quarter, inflation as measured by the WPI, continued to remain above the comfort levels of the RBI. It came in at 7.5 per cent in July, 8 per cent in August and 7.8 per cent in September.
- The IIP (Index of Industrial production) was marginally negative for the months of July and September. IIP Growth stood at -0.2 per cent in July, witnessed an up-move 2.3 percent in August and was again negative (-0.4 per cent) in September 2012. However for H1FY13 the industrial production remained under pressure.
- The Rupee remained highly range bound trading within a band of 52-55 against the USD, though it found some respite as compared to the June 2012 quarter.
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