Refineries skew India Inc's Q4 results

Excluding their robust performance, the rest posted 13% decline in net profit

Refineries, mainly those of oil marketing companies, saved the day for India Inc in the fourth quarter of the past financial year. The net profit of a common sample of 1,247 companies, excluding banks and financial services companies, went up 17 per cent compared with the same period a year ago.

The growth is impressive, considering that it comes on the back of a slump in the net profit growth rate for two preceding quarters. The growth in at least two quarters before that was in single digits.
 

SLICK SHOW Growth in %
Quarter ended	Sales	Net profit

 

Dec 200718.6618.03 Mar 200828.358.85 Jun 200836.444.49 Sep 200839.34-35.00 Dec 200812.94-23.16 Mar 2009-1.4916.71 (No of cos 1,247 excluding banks and financials)

But that’s only a small consolation. Excluding the refineries, the remaining 1,241 firms reported a steep 13 per cent decline in net profit to Rs 32,216 crore, against Rs 36,909 crore in the previous comparable quarter.

The refining companies posted a record 280 per cent growth in net profit (Rs 15,664 crore from Rs 4,117 crore), riding high on government bonds and lower crude oil prices. Indian Oil Corporation was back in the black by posting a net profit of Rs 6,622 crore against net loss of Rs 414 crore, while BPCL posted almost 63-fold rise in its net profit to Rs 3,628 crore (Rs 58 crore) during the quarter.

The other sectors that reported over 40 per cent growth included the power, automobiles, shipping, electronics and sugar sectors. Airlines and aluminum sectors were also back in the black. But the good news ended there.

The metal, steel, fertiliser, construction, auto ancillaries and hotel sectors posted an over 35 per cent decline in the net profit growth, pulling down the overall numbers.

The refineries helped the net profit of 1,247 companies go up to Rs 47,881 crore in the quarter ending March, 2009, compared to Rs 41,027 crore in the corresponding quarter of the previous year.

Profit margin also increased due to this robust performance by the refineries. The net profit margin of the 1,247 firms increased from 8.3 per cent to 9.9 per cent in the quarter. Operating profit margins increased to 18.3 per cent from 15.7 per cent during the quarter.

The refineries, however, played an exactly opposite role in corporate India’s sales performance during the quarter. For the first time, the sample of 1,247 companies reported a 1.5 per cent decline in sales, due to a 17 per cent fall in sales growth of the six refining companies. Excluding them, the sales growth of India Inc was up 6 per cent during the March 2009 quarter.