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India Inc’s sales and profits to rise in FY 2010: CMIE

India Inc’s sales and profits to rise in FY 2010: CMIE
PTI
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First Published: Thu, Mar 05 2009. 02 58 PM IST
Updated: Thu, Mar 05 2009. 02 58 PM IST
Mumbai: Corporate India’s sales and profitability are expected to improve in FY ‘10, Centre for Monitoring Indian Economy (CMIE) said in its monthly review.
“We expect the profit performance of corporate India to improve in FY ‘10 with the petroleum products companies returning into profits in the March 2009 quarter,” the CMIE report said here.
Aggregate net profits of Indian corporates are expected to rise by 74.4%. The PAT margin will also improve to 7.7% from 4.8% in FY ‘09, it said.
India Inc reported a major deceleration in sales growth to 11.9% in the December 2008 quarter from 33.9% in the September 2008 quarter.
The prime reason behind the slower growth was the poor sales performance of the manufacturing sector due to the steep fall in prices of commodities such as ferrous metals, edible oils, petroleum products and the weak export demand for textiles, gems & jewellery.
Although aggregate net profits plummeted by 40.5%, the PAT margin improved to 4.7% compared to 3.5% in the preceding quarter.
This was mainly because of the reduction in losses incurred by the petroleum products sector, it said.
Other manufacturing industries and non-financial services, however, saw an erosion in margins on a sequential basis.
CMIE expects corporate India’s sales to decelerate further in the March 2009 quarter. Further, sales are expected to decline marginally in the quarters ending June and September 2009 as the year-on-year fall in the commodity prices will become steeper during this period.
However, sales are expected to pick-up thereafter, it said.
Income of corporate India is expected to rise by 7.4% in FY ‘10. The growth will be mainly driven by the banking, construction, non-financial services and electricity sectors.
The construction and the banking sectors will continue to report robust growth of 38.3% and 25.4%, respectively, the report said.
The growth in electricity is expected to decelerate to 10.5%. The manufacturing sector, however, is expected to report a 1% fall in income because of the steep fall in commodity prices, CMIE said.
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First Published: Thu, Mar 05 2009. 02 58 PM IST