Royalties decline marginally in FY12

Given a relatively weak year, most of the companies have either reduced their royalty to sales or kept the ratio constant, unlike the previous two years, when the royalties paid jumped significantly.

Out of the total BSE500 companies, 22 companies have royalty to sales (R/S) ratio of more than 1. This excludes mining companies which pay mining royalties to the government. Out of these 12 companies have reduced their royalty to sales, 5 have kept it constant and the remaining 5 companies have increased their royalty to sales.

The only five companies which increased their R/S ratios were Akzo Nobel, Timken India, Entertaintment Network, Future Ventures and ABB. The biggest jump in the royalty payments was taken by Akzo Nobel. They almost doubled their royalty to sales ratio from 0.9 to 1.8, followed by Future Ventures which increased its royalty to sales ratio from 1.7 to 2.6 in last one year. This jump in the royalty was taken by Future Ventures despite the rise in the losses year-on-year.

The companies that topped the list in the last fiscal were the consumer companies at R/S 5.2. In the previous year R/S for Colgate Palmolive and P&G Hygiene were 5 and 5.8 respectively. These were followed by Maruti Suzuki and Page Industries ( owner of the Jokcey brand) with R/S ratio of