Sugar, IT, steel firms lead Q4 profit uptick

MUMBAI, APRIL 21: The fourth quarter profits of 127 early-bird companies that have announced results have increased by 61.5%. This has been backed by a 37% growth in sales and a nearly 24% rise in other income. The profit after tax (PAT) to sales ratio of these companies increased from 12.9% during January-March 2004 to 15.2% during January-March 2005.

The profit growth was led by sugar (which recorded the highest increase), steel, IT, textiles, NBFC, hotels and engineering companies. Pharma, cement and automobiles were the laggards. The net profit of these 127 companies increased to Rs 3,220 crore from Rs 1,993 crore.

Aggregate sales rose to Rs 21,127 crore (Rs 15,404 crore) during the quarter. Other income jumped 23.9% to Rs 1,092 crore from Rs 881 crore.

The aggregate sales and net profit of five sugar companies increased by 73.4% and 1,108.7%, respectively. Attributing high sugar prices as the reason behind increase in profitability of sugar companies, AP Sarma, executive vice-president, IDBI Capital, said: "Sugar prices ruled high owing to short supply following the failure of sugarcane crop. Sugar companies having access to sugarcane area did especially well."

Following the sugar firms were hotel companies. Though only two such companies have declared their results, their aggregate profit has risen 952.4% compared to a 25.9% increase in operational income.

-Pradip Kumar Dey
Financial Express
Date: 22 April, 2005