India Inc's growth at 8-year low, profit up 27.6%

India Inc's net sales growth rate slipped to an eight-year low of 2.1 per cent in the financial year ended March 2010, as declines in global price declines hurt commodity companies and the global crisis led to negligible rises in exports.

In 2001-02, demand recession had clipped the sales growth rate of corporate India to 2.6 per cent from the double-digit one of the earlier years.

On profitability, India Inc did well, with a 25 per cent bounce-back in net profit growth rate, from the double-digit decline in 2008-09.

Of the 2,460 companies studied in Mumbai, 51 per cent of these, accounting for 42 per cent share in net sales, reported a decline in these.

While 282 companies, with three per cent share in sales, reported a growth rate of over 50 per cent each.

As many as 398 companies, accounting for 14 per cent of net sales, posted single-digit growth, while 546 firms (20 per cent share) reported 10-20 per cent rise in net sales.

Another 370 who contributed 21 per cent in net sales showed a 20-50 per cent rise in these. Despite 456 companies recording a net loss of Rs 17,000 crore (Rs 170 billion), as many 2,460 others aggregated a 27.6 per cent rise in net profit.

There was a turnaround  by 306 companies, with a net profit aggregate of Rs 8,676 crore, while 454 firms accounting for a 17 per cent share in net profit posted net profit here of over 100 per cent each.

Of the total sample, 20 per cent showed a decline in net profit, while 21 per cent other showed net profit growth of 25-100 per cent each.

Of the 61 sectors broadly classified by Capitaline Plus, 11, including automobiles, cement, healthcare and tyres, posted over 20 per cent growth in net sales.

While 20 others, including auto ancillaries, construction, power and pharmaceuticals, recorded net sales growth of 10-20 per cent.

The growth rate for telecom services, software, fast moving consumer goods and capital goods sectors slipped to single-digit from 20-plus per cent in 2008-09.

While paper, sugar, hotels, steels, shipping and fertilisers reported declines in net sales. The year 2009-10 was most profitable for automobile makers.

Their net profit jumped almost seven-fold, from an 82 per cent decline in 2008-09.

Auto ancillary makers moved with auto makers, up 300 per cent from a 54 per cent decline in the previous year.

Pharmaceuticals, non-ferrous metals, infrastructure and construction firms reported a healthy growth in profits from a 40-50 per cent decline in the previous year.

Sugar and telecom sectors reported a decline in net profit, from healthy profits in the previous year.