Slack Generating Capacity Shorts Electrical Goods Cos

FINANCIAL HIGHLIGHTS OF SELECTED ELECTRICAL GOODS MANUFACTURING COMPANIES

Electrical and electronic goods manufacturing companies posted much lower growth in sales and profits in 1996-97 compared to the previous two years. From a nearly 32 per cent growth in both 1994-95 and 1995-96, the selected 16 prominent electrical and electronic goods manufacturing companies recorded only a 10 per cent growth in sales turnover in 1996-97. These companies witnessed a negative rate of growth in both operating and net profit in 1996-97. While aggregate operating and net profit growth rates were 35.2 per cent and 51.9 per cent respectively in 1994-95, the corresponding figures in 1995-96 were 42.7 per cent and 45.8 per cent respectively. According to industry sources, the demand for electrical goods has slowed down due to sluggish activities in the power generating sector in recent years. The addition to fresh generating capacity has been significantly slow in 1995-96 and 1996-97. As a result, both the electrical equipment sector and electrical consumer goods sector suffered a demand recession in 1996-97.

 

The 16 electrical and electronics companies chosen for this study had turnovers ranging between Rs 72 crore and Rs 1509 crore in 1994-95, 1995-96 and 1996-97. In most cases, the analysis is based on the unaudited results for 1996-97. In case of some companies the half-yearly results of 1996-97 have been clubbed together to analyse the annual performance. For those companies which had accounting periods of more or less 12 months in any of the three years under study, the annualised figures have been arrived at for the sake of homogeneity

In 1996-97, Yokogawa Blue Star topped the list in terms of sales growth, posting a figure of nearly 33 per cent. Of the 16 selected companies, only GEC Alsthom improved its sales turnover by nearly 13 per cent. over the previous years figure of 9 per cent. Only 5 companies recorded a positive growth in net profit, while most of these companies had recorded a positive profit growth in the previous year. In case of profitability ratios, 5 companies bettered their ratios in 1996-97.