The Hindu Business Line : India Inc in pink of health

The earnings card of Corporate India for the first quarter of the current fiscal suggests they are in the pink of health. Bolstered by healthy accretion to revenues, earnings have grown by 30 per cent. The quality of earnings also was better with a 19-per cent drop in one-off items.

Among the earnings announcements over the past week, quite a few companies attracted attention. Tata Motors, backed by the success of its Ace truck, and Maruti Udyog — aided by the launch of Swift and better margins — reported healthy earnings growth. Sun Pharmaceuticals was also in the limelight. On the flip side, State Bank of India, which reported a 35-per cent dip in earnings on the back of a drop in treasury income and higher staff costs, was a dampener.

Petrochem

Higher crude oil prices, which helped ONGC report a 24-per cent earnings growth, appears to have put pressure on oil marketing companies such as BPCL, HPCL and IBP. Revenue growth took its toll on these companies, which have negative operating margins.

Standalone refineries, however, bucked the trend and posted good growth in earnings.

While the steel sector appears to have lost its sheen, non-ferrous players such as Hindalco and National Aluminium reported a surge in both earnings and revenues on the back of higher realisations.

Textiles sector

The earnings card from the textiles sector was a mixed bag. Large integrated players such as Arvind Mills, Raymond and Welspun India reported a disappointing performance on the earnings front.

However, there appears be steam still left in the spinning sector companies such as Mahavir Spinning and Rajasthan Spinning, with both of them reporting stable margins and higher revenue growth.

Telecom

Stocks in the telecom sector, with the exception of MTNL, reported a robust performance for the quarter. Bharti Airtel reported a 48-per cent earnings growth on a consolidated basis, aided by a surge in revenues.

Tata Teleservices (Maharashtra) turned in a sharp rise in operating profits on the back of 1,400-basis point rise in margins to about 18 per cent.

Pharmaceuticals

The pharma sector was also in the limelight. Most companies reported a double-digit operating profit growth accompanied by better margins and a healthy revenue growth. Jubilant Organosys, Orchid Chemicals and Dr. Reddy's Labs (DRL) reported impressive earnings growth; earnings doubled in the case of the first two, while it quadrupled in the case of DRL.

Among the stocks from the pharma pack that disappointed include Wockhardt and GlaxoSmithKline Pharma.

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