R940 crore. A weak global economy has hurt export and import volumes at the firm, which contracted for the second straight quarter, down 6% y-o-y in the three months to December. Volumes in the home market dipped 5% y-o-y and could be under pressure due to the increase in railway freight.
Overall, it’s been a desultory December quarter for India Inc so far with companies not able to drum up revenues.
Net sales for a clutch of 749 companies (excluding banks and financials) has risen just 12.5% y-o-y, the slowest in several quarters. The weak top line should have stunted profits but softer commodity prices have helped and with expenditure under control — up just 10.8% y-o-y — operating profit margins have expanded 125 basis points y-o-y, driving up operating profits by 22%. A big jump in other income of 25% y-o-y has helped push up net profits for the sample by 33.8% y-o-y.
How sluggish the economy is is reflected in the anaemic growth of the core sector index, which gained just 2.6% y-o-y in December, thanks to negative growth in coal, natural gas and fertilisers. The index, which has a weight of 37.9% in the IIP, has seen a growth between April and December of 3.3% y-o-y on a base of 4.8% in the corresponding period of 2011-12. India’s manufacturing PMI moderated to a three-month low of 53.2 in January from 54.7 in December with the fall resulting from both domestic and export new orders; the new orders to inventory ratio fell to 1.16 from 1.21, indicating some downside risk to the PMI in February.