Study shows improved profitability

THE information technology and telecom sectors improved their bottomlines by 118 per cent and 68.31 per cent respectively in the financial year 2000-01 against 76.50 per cent and a negative 19.20 per cent respectively in the previous year, according to a study conducted by MyIris.com, a comprehensive personal finance portal.

In the IT sector, on a sample of 30 companies, the revenue rose by 60.43 per cent during the year while the operating profit increased by 90.7 per cent. Interest charges were lower by 39 per cent whereas there was a rise of 19.4 per cent in the previous year.

In the telecom sector the growth in income was 9.27 per cent against 7.56 per cent but the net profit rose by 68.31 per cent against a negative 19.20 per cent for a sample size of 13 companies.

On a sample of 53 companies covered under the engineering sector the growth in income more than halved to 4.31 per cent from 9.90 per cent. The net profit after taxation registered a growth of 21.68 per cent against an impressive 54.41 per cent in the previous year.

In the steel sector, the details given for 20 companies reveal that while the income rose by 13.73 per cent against a negative 8.83 per cent in the previous year, there was a marginal increase in net loss. However the results of major companies such as Tata Steel are yet to come out. The operating profit improved by 38.6 per cent but interest charges rose by only 16 per cent, indicating higher profitability.

On a sample size of 26 companies covered under the FMCG (fast moving consumer goods) category total income declined by 12.80 per cent against a decline of 4.73 per cent. But the operating profit looked up marginally. Interest charges however declined by 20 per cent against a drop of 14 per cent in the previous year. The year-on-year growth in net profit was 5.50 per cent.

In the automobile sector, the data available for 17 companies reveal that income declined marginally but the operating profit showed a decline of 14.2 per cent. There was also a sharp drop in net profit by 29.2 per cent. In 1999-00 the net profit was higher by 26.27 per cent.

The cement sector (for which details of only five companies are available) income declined by 7.24 per cent compared to a 7.46 per cent growth in the previous year. However the operating expenditure was much lower resulting in an increase of 60 per cent in the operating profit. Interest charges were marginally higher. There was a very small net profit against sizable losses in the two previous years. Results of major companies such as Larsen & Toubro and India Cements are yet to be out.

The chemicals sector registered a less pronounced growth based on the sample size of 20 companies with the income registering a rise of 11.19 per cent against 18.06 per cent in the previous year. The operating profit dropped by 5 per cent. Interest charges were however up by 25 per cent. The profit after tax declined by 33.73 per cent. The growth in the previous year was 33.3 per cent

The consumer durable sector showed improved performance with a steady rise of 11.88 per cent in income. The sample of four companies under this sector reveal that the profit after tax rose sharply by 31.34 per cent. In 1998-99 there was a small loss.

The oil and gas sector, for which details of only two companies are available, registered a 24.3 per cent growth in total income. The growth in the previous year was 28.2 per cent. The net profit rose by 31.78 per cent against a decline of 16.53 per cent in the previous year.

In the petrochemicals sector, five companies put together reported a sharp rise of 76 per cent in total income but the operating profit improved by only 17.4 per cent because of a spurt in crude prices. The net profit rose by 10.61 per cent whereas it was as much as 41 per cent in 1999-00.

In the pharma sector under which details for 34 companies are available, the year-on-year growth in income was 13.44 per cent against 20.34 per cent. The net profit rose by 31.33 per cent, same as in the previous year.

Income from operations of three companies in the power sector increased by 8.79 per cent while the net loss worsened by 30 per cent.

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