Mumbai: The Rising rupee and a higher base have decelerated Indian companies’ topline growth to 15.1% for the quarter ended September 2007, the Centre for Monitoring Indian Economy said in its monthly review here.
“We had forecast a sales growth of 16.3% for the September quarter and expected the slowdown because of a higher base and slowdown in certain large sectors like IT, steel, aluminium products, automobile ancillaries, petroleum products, commercial vehicles,” CMIE said.
The IT sector was stung by the rising rupee, while the slowdown in the steel sector was purely on account of a higher base coupled with a less than 7% increase in steel prices, the think tank added.
The sugar sector, though it has not sufficiently aggregated in terms of number of companies, reported declining sales because of a 25-30% dip in unit realisations.
The aluminium and aluminium products sector suffered restricted growth on account of capacity constraints of companies. The paper and paper products sector met with a similar fate in the September quarter.
Commercial vehicles were suffering because of high interest rates, excess capacity additions on certain routes besides a very heavy year-ago base, the CMIE report said.
The slower growth in the fertilizer sector was due to low production on account of raw material shortage.
The CMIE report pointed out that sales growth of companies in the manufacturing sector also slipped into single digit rates. The 9% growth in sales revenue was the slowest at least in the last 13 quarters.
CMIE indicated that profitability, however, improved with net margins expanding to 8.8%, the highest in at least the past 13 quarters.
The margin expansion came on the back of a comparatively much slower growth in raw materials expenses. Raw material expenses grew by a mere 6.9% while sales grew by 9.1%.