India Inc third quarter results belie turnaround hopes

Feb 21 2013, 10:21 IST
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SummaryAt operating & net profit levels, mid-cap companies fare better than large-cap firms.

unchanged whereas that of the largecap stocks dipped by 80 bps.

Generally, the operating performance of large-caps which have sizable production capacities, tend to get affected by higher raw material costs. On other hand, mid and small size companies that have to raise capital at a higher interest rate, see a decline in their net profits in a high interest rate environment. The increase in working capital requirement further jacks up their interest cost compared to large-caps.

For the analysis we bifurcated the set of companies according to their market-cap; companies with a market-cap of more than R5,000 crore was deemed as large-caps and those with a marke-cap between of R2,000 to R5000 crore were grouped as mid-caps.

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