Companies' Q2 results show healthy rise in net profit

The 452 companies that have so far declared their financial results for the quarter ended September have posted a healthy 28.5 per cent rise in net profit, but only a single-digit growth of 3 per cent in net sales.

The net profit growth reported by India Inc during this quarter was the highest since the one in June 2007, when a sample of 381 companies showed a 35 per cent jump in net profit.

The profit margins also improved. The operating profit margin is up 320 basis points to 21.9 per cent in September, while net profit margin is up 255 basis points to 12.4 per cent.

Automobiles, cement, real estate, paints, gas distributions, auto ancillaries and engine sectors have all posted over 50 per cent growth in net profit. Also, a smart turnaround by sugar, petrochemicals, shipping and textile sectors, and reduction of losses by food processing, glass and electronics sectors has pushed up the profit growth rate.

The growth in profitability was helped by lower interest costs. For manufacturing companies, this increased by 9.8 per cent against over 20 per cent growth in earlier quarters.

Out of 452 companies, the net profit of as many as 98 has more than doubled.

Thirty-six companies reported net profit growth between 50 per cent and 100 per cent, while 36 others reported a net profit against a net loss in the same quarter of the previous year.

The automobile sector has stolen the show by reporting over 100 per cent growth in net profit.

The six auto companies reporting quarterly numbers so far have posted a combined Rs 1,613 crore net profit against Rs 794 crore reported in the same period last year.

Jubilant Organosys, Finolex Industries and Garware Offshore are among the those who have turned losses to profit, while Subex, Upper Ganges Sugar and SRF Polymers have reduces their losses by more than 50 per cent.

However, non-ferrous metals, hotels, tea and coffee, entertainment, bearings, ferro alloys, pesticides and mining sectors have reported a fall in their net profit.