India Inc's revenue surge holds out hope

MUMBAI: The government���s Index of Industrial Production (IIP) numbers and India Inc���s revenue figures appear to be telling two entirely different stories. An ETIG analysis shows that sales growth of listed manufacturing companies, in the first half of this financial year (2008-09 ), has rocketed by 35% ��� one of the highest in eight years.

The growth appears to contradict the slowdown indicated by the IIP data. IIP growth slipped to 5.2% from an average annual growth of 9-10 % over the past three years.

The official data would have us believe that growth in manufacturing, mining and electricity has slowed down considerably in the first half of FY09. However, listed companies in these sectors have actually reported acceleration in revenue growth.




To be fair, IIP tracks production, while company revenues also reflect a change in prices. But the rise in Corporate India���s sales growth rate is significant; even after factoring in high inflation, there appears to be a mismatch between the official statistics and corporate results.

Of course, it is not possible to compare the negative IIP growth in October with corporate performance for that month, since financial results for the October-December quarter will be released next month. The ETIG study analysed IIP numbers and aggregate revenue growth data of companies in the three sectors for the past seven years. The analysis shows there has always been a big gap between the annual growth rate of IIP and the revenue growth of listed firms.