Figures do the talking for India Inc’s stellar show

MUMBAI: India Inc has added another feather in its cap by recording stupendous performance in the quarter ended December ���06. Analysts say earnings prospects are good but one also has to watch out for factors like the kind of industry-specific proposals the government will announce in the forthcoming Budget and the trend in inflation in the country, which could influence corporate performances in coming quarters.

The third quarter performance of the 537 companies, whose results were available with ET, showed a robust picture of profitability as their combined net profit jumped 60% to Rs 24,277 crore during the quarter. The strong bottom line growth was backed by a 32% rise in the aggregate sales to Rs 1,90,247 crore and a 26% improvement in other income to Rs 10,325 crore during the period.

The stellar show was evident across sectors with companies from cement, telecom, IT, construction, oil, capital goods and consumer durable recording a significant improvement in the overall performance.

���Despite large bases, heavyweights like Reliance Industries and Bharti Airtel have come out with positive surprises. We have estimated earnings growth of 35% for Sensex companies excluding oil, which the corporates are expected to surpass comfortably,��� said Sandeep Nanda, head of research, Sharekhan, one of leading retail brokerages in the country.
The brokerage has already upgraded earnings for capital goods, cement companies and private sector banks for ���07-08, reflecting their positive outlook on these sectors.

Among the top 25 companies ranked on the basis of sales, Reliance Industries, ICICI Bank, Bharti Airtel, TCS, Wipro, Infosys Technologies, Sterlite Inds, Hind Zinc, BoI, BoB and Grasim Inds reported good numbers, contributing significantly to the growth in earnings of the 537 companies.

Riding high on the back of firm cement prices and robust demand, cement companies stole the show with the 10 companies, which have announced results so far, posting an impressive 4.7 times jump in the aggregate net profit to Rs 640 crore. Their net sales was up 61% at Rs 3,162 crore. Grasim Industries, Ultratech Cement and India Cements are few examples where the companies have seen a sharp rise in bottom lines.
Telecom companies led by Bharti Airtel witnessed a boost in earnings on the back of an accelerating growth in mobile users in the country. The five telecom companies doubled their net profit to Rs 972 crore while net sales rose 50% to Rs 5,334 crore.

���At barely 15%, mobile teledensity in India still has a long way to go before it can come even close to the likes of China, where the teledensity is well over 35%. Bharti, being the marker leader, appears poised to become one of the main beneficiaries of this secular growth story,��� according an analyst with Angel Broking.

IT companies led by heavyweights Infosys Technologies, TCS and Wipro released robust numbers though few others like Satyam Computer Services and HCL Technologies posted a fall in earnings. Total net profit of the 57 infotech companies grew 35% to Rs 3,975 crore while their sales improved 39% to Rs 17,927 crore.

Many construction companies have come out with smart performances, which was also reflected in the fact that the aggregate net profit of 16 such companies shot 102% to Rs 233 crore while net sales rose 26% to Rs 2,081 crore. Capital goods was another winner sector with the 40 industry players recording a 75% growth in net profit to Rs 523 crore and a 42% improvement in sales to Rs 6,407 crore during the quarter ended December ���06.