No quarterly sales skew: ETIG study
India Inc’s revenues are distributed evenly across the four quarters of a financial year.This goes against the conventional wisdom that many sectors generate bulk of their sales in particular quarters, due to the nature of their business.
By Ashish Agrawal, ET Bureau |
India Inc���s revenues are distributed evenly across the four quarters of a financial year, reveals an ETIG study. This goes against the conventional wisdom that many sectors generate bulk of their sales in particular quarters, due to the nature of their business.
Just 4 of the 11 sectors covered in the study showed seasonality of more than 10%. The ETIG study compiled the average quarterly sales of different sectors for the four financial quarters over the last six years. Seasonality was defined as the percentage by which peak sales in any quarter exceeded the average quarterly sales.
So, if maximum sales for any quarter for a sector is Rs 1,200 crore and the average quarterly sales is Rs 1,000 crore, then seasonality would be 20%. Five sectors show peak sales in the January-March quarter, whereas four see higher business in the October-December quarter. None of the sectors showed a significant degree of seasonality of more than 20%.
Hotels, tourism & recreation had the maximum seasonality at 13.3%, with peak sales during the quarter ending December 31. This could be on account of year-end vacation falling in the period when people travel. Consumer durable sector, widely believed to depend on sales during the festival season, also shows high seasonality of 11.3%.
However, the peak sales take place in the January-March quarter, followed closely by July-September quarter. This could be because companies sell products to dealers in advance whereas consumer sales for appliances shoot up during the summer months of April-July, and for electronic products during the festival period October-December.
Capital goods recorded 10% seasonality with sales peaking in the quarter ending March 31. This is because sales are booked on completion of projects and companies usually take a conservative view through the first three quarters of the financial year.
In contrast, some consumer demand-driven sectors such as auto (4%) and FMCG (7.6%) have low seasonality, indicating demand spread out through the year. FMCG industry leader Hindustan Unilever has a low seasonality of only 6.0% with sales peaking in October-December quarter, whereas passenger carmaker Maruti Suzuki records higher sales during the July-September quarter with a modest seasonality of 6.4%.
Among individual firms, Procter & Gamble has high seasonality of 21.1% with October-December quarter showing maximum sales. Commercial vehicles maker Ashok Leyland is next with seasonality of 20.7% for the quarter ending March 31. Hospitality firm Indian Hotels is the only other company to have seasonality of more than 20%. Dabur(17.8%), Pantaloon (15.2%) and Titan (13.3%) are other companies with high seasonality.
Just 4 of the 11 sectors covered in the study showed seasonality of more than 10%. The ETIG study compiled the average quarterly sales of different sectors for the four financial quarters over the last six years. Seasonality was defined as the percentage by which peak sales in any quarter exceeded the average quarterly sales.
So, if maximum sales for any quarter for a sector is Rs 1,200 crore and the average quarterly sales is Rs 1,000 crore, then seasonality would be 20%. Five sectors show peak sales in the January-March quarter, whereas four see higher business in the October-December quarter. None of the sectors showed a significant degree of seasonality of more than 20%.
Hotels, tourism & recreation had the maximum seasonality at 13.3%, with peak sales during the quarter ending December 31. This could be on account of year-end vacation falling in the period when people travel. Consumer durable sector, widely believed to depend on sales during the festival season, also shows high seasonality of 11.3%.
However, the peak sales take place in the January-March quarter, followed closely by July-September quarter. This could be because companies sell products to dealers in advance whereas consumer sales for appliances shoot up during the summer months of April-July, and for electronic products during the festival period October-December.
Capital goods recorded 10% seasonality with sales peaking in the quarter ending March 31. This is because sales are booked on completion of projects and companies usually take a conservative view through the first three quarters of the financial year.
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In contrast, some consumer demand-driven sectors such as auto (4%) and FMCG (7.6%) have low seasonality, indicating demand spread out through the year. FMCG industry leader Hindustan Unilever has a low seasonality of only 6.0% with sales peaking in October-December quarter, whereas passenger carmaker Maruti Suzuki records higher sales during the July-September quarter with a modest seasonality of 6.4%.
Among individual firms, Procter & Gamble has high seasonality of 21.1% with October-December quarter showing maximum sales. Commercial vehicles maker Ashok Leyland is next with seasonality of 20.7% for the quarter ending March 31. Hospitality firm Indian Hotels is the only other company to have seasonality of more than 20%. Dabur(17.8%), Pantaloon (15.2%) and Titan (13.3%) are other companies with high seasonality.
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