CII Communique - February, 2010

cover story
reduce the fiscal deficit to 5.5% of GDP, as articulated
by the Finance Minister.
Companies are Seeing Sales Pick-up
The last year has also been a difficult year for companies
– the global economy entered a recession, and
commodity prices tumbled, resulting in a slide in most
companies’ top line growth.
In the quarter ending December 2009, companies’ net
sales have just started picking up. The aggregate sales of
458 companies in the BSE-500 index that have declared
their results grew by 12.5% in the quarter ending
December 2009 after declining for three consecutive
quarters. This probably reflects some recovery in
volumes as well as prices.
The aggregate profit-after-tax (PAT) of the same set of
companies grew at 33.8% in Q3FY2010 compared with
a decline of 24.6% in the same quarter of the previous
year. The decline in the cost of raw materials and other
cost rationalization measures has helped companies to
maintain their profitability.
Performance of 458 companies in the
BSE-500 index
50
40
30
20
10
0
-10
-20
-30
-40
Q2FY08
Q3FY08
Q4FY08
Q1FY09
Q2FY09
Topline
Source: Prowess, CMIE
There is a lot of diversity in the performance of
companies across sectors. The sectors that have seen
the strongest growth in net sales are agriculture and
automobiles, followed by sectors such as consumer
goods, media and metals which have grown at a fairly
strong rate. Sectors where the topline has declined
include chemicals, power, telecom, transport and
logistics. Growth in the IT sector has remained sluggish
for the second consecutive quarter.
With few exceptions, most sectors have shown strong
growth in their bottom lines. Four sectors where the
bottom line continues to decline are construction, trade,
tourism and telecom. In the case of capital goods,
both topline and bottomline have picked up from the
previous quarter.
Q3FY09
Q4FY09
Q1FY10
Bottomline
Q2FY10
Q3FY10
Year
Corporate Performance by Sector
Dec
2008
Mar
2009
Jun
2009
Sep
2009
Dec
2009
BSE 500 Index Net sales 13.7 -0.3 -8.2 -7.3 12.5
(458)
(%)
PAT (%) -24.6 20.8 19.0 38.3 33.8
Agriculture (11) Net sales 0.0 7.3 11.7 27.6 44.4
(%)
PAT (%) -48.7 -28.8 125.7 2.9 421.3
Automobiles (13) Net sales -17.5 -7.4 3.1 16.3 56.1
(%)
PAT (%) -72.9 -4.2 24.8 98.0 396.9
Banking & FI Net sales 31.0 23.3 18.9 10.9 2.9
(60)
(%)
PAT (%) 13.4 25.8 50.7 22.9 5.1
Capital Goods Net sales 10.7 18.8 9.1 1.4 10.3
(58)
(%)
PAT (%) -26.2 0.2 17.2 17.9 43.6
Cement (12) Net sales 9.7 14.1 22.8 17.3 14.3
(%)
PAT (%) -25.7 4.2 40.7 68.5 29.9
Chemical (19) Net sales 76.5 14.0 -2.2 -37.2 -26.9
(%)
PAT (%) -5.4 -42.7 11.6 0.8 28.7
Construction (42) Net sales 12.6 9.0 5.2 8.1 19.4
(%)
PAT (%) -25.0 -44.7 2.8 -11.9 -8.2
Consumar Net sales 11.3 11.6 11.2 12.8 20.9
Goods (39) (%)
PAT (%) -24.3 -9.5 24.0 25.4 60.8
Diversified (8) Net sales 20.3 14.8 7.8 -0.8 7.4
(%)
PAT (%) -45.3 21.5 -18.2 7.8 51.7
Drugs (23) Net sales 8.8 11.6 6.3 7.1 11.2
(%)
PAT (%) -83.4 -48.8 36.7 96.5 75.8
IT (39)
Net sales 24.9 12.2 10.0 2.2 3.8
(%)
PAT (%) 0.7 23.7 36.4 14.8 20.7
Media (19) Net sales 14.4 -2.1 -4.1 4.4 18.9
(%)
PAT (%) -85.7 -21.4 -29.0 231.8 798.7
Metals (26) Net sales -7.2 -13.0 -15.2 -13.3 28.4
(%)
PAT (%) -50.8 -41.1 -32.9 -26.5 108.8
Oil & Natural Net sales 7.1 -15.0 -30.1 -21.7 16.5
Gas (19) (%)
PAT (%) -41.2 191.9 28.9 35.6
Other Non- Net sales 25.5 24.1 18.9 9.5 21.4
Financial
Services (8)
(%)
PAT (%) 8.0 12.0 17.8 -14.1 30.4
Power (16) Net sales 26.7 7.1 8.3 2.3 -3.1
(%)
PAT (%) -12.1 -0.8 25.6 -0.2 40.8
Telecom (10) Net sales 21.9 14.0 6.8 1.8 -1.0
(%)
PAT (%) -20.4 34.7 23.8 2.0 -12.8
Tourism (5) Net sales -16.4 -24.0 -21.9 -18.2 0.6
(%)
PAT (%) -53.2 -39.0 -57.3 -67.4 -8.0
Trade (12) Net sales 48.0 -20.9 1.7 -11.5 4.0
(%)
PAT (%) -25.5 -43.8 -31.5 -27.6 -17.0
Transport and Net sales 35.1 -0.3 -7.3 -15.7 -4.4
Logistics (19) (%)
PAT (%) -53.3 9.4 -58.4 51.2
Source: Prowess, CMIE
14 | February 2010 Communiqué