Early birds post high sales growth in Q1, but profits take a knock

2008-2009
Q1 

Q1Q2Q3Q4 Net sales1414.318.526.536.1 Net profit3223.62812.413.4 (% growth rate)  No wonder, exchange fluctuation losses saw the other income declining by 5.5 per cent compared to an increase of 92.6 per cent same time last year. The depreciation of rupee increased the cost of fund of overseas borrowers while the increase in lending rates jacked up the cost of domestic borrowers. The result: Interest is up 35.8 per cent as against 16.9 per cent same time last year.  The early birds posted a decline in profit margins. The operating and gross margins declined 3.15 percentage points each to 20.8 per cent and 19.3 per cent, respectively while net profit margins fell 2.48 percentage points to 13.4 per cent.  The outlook appears to be mixed. The cement sector may post a decline in profit growth, going by the unimpressive performance of UltraTech Cement, JP Associate, Prism Cement and Shree Cement.  However, pharmaceuticals, steel tubes and pipes and pesticides sectors could do better, while tyre, services, bearing and engines sectors may falter on sales growth and automobiles, constructions, pumps and compressors, textiles spinning and organic chemicals sectors may face a sharp reversal in fortunes on net profit growth.