India Inc may not have done well in terms of Profit After Tax (PAT) growth in the previous fiscal, but FY10 could see it clocking a robust growth rate of over 77 per cent in PAT, an economic think-tank has projected in its latest report.
India Inc may not have done well in terms of Profit After Tax (PAT) growth in the previous fiscal, but FY10 could see it clocking a robust growth rate of over 77 per cent in PAT, an economic think-tank has projected in its latest report.
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"India Inc is expected to post a robust 77.9 per cent growth rate in PAT in 2009-10," the Centre for Monitoring Indian Economy (CMIE) said in the report. This would be substantial growth, considering that the December 2008 quarter witnessed a sharp 39.7 per cent decline in PAT on account of a sudden and steep fall in commodity prices, poor export demand, high cost of borrowings and inventory losses incurred by a host of companies, the report said.
CMIE attributes this projected high growth to expectation that the petroleum products sector would return to profit from March 2009 quarter. The sector had incurred losses during April-December 2008 due to under-recoveries and had eaten away more than one-third of the profits of the rest of corporate India, the report said.
"Excluding the petroleum product sector, the rest of Indian corporates are expected to report a 23.1 per cent rise in aggregate PAT in 2009-10," the CMIE has said.
On the sales side, the CMIE expects India Inc to post a 7.4 per cent rise in FY10, with the same plunging into negative territory in the first half of the current fiscal.
This fall was likely to come mainly on account of the aggravation of Year-on-Year fall in prices, the report said, adding that, "the manufacturing sector is likely to report a 11-12 per cent decline in sales in the first half of FY10."
On the other hand, sales growth of the non-financial services was likely to be in the range of 16-19 per cent, lower than the preceding quarters, the CMIE said.
Sectors such as banking, construction and electricity were expected to remain isolated from the impact of global slowdown, it said. The sales growth of corporate India would pick-up in the second half and would lead to a 7.4 per cent rise in sales for 2009-10, the CMIE said in its report.
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