INSUBCONTINENT EXCLUSIVE:
The January-March period proved to be another soft quarter for India Inc despite a favourable base
However, more than 15 companies turned around during the quarter gone by after posting losses for five sequential quarters.
An improvement
in performance by information technology (IT), pharma, oil and gas, cement and consumer durables players supported earnings growth during
the quarter.
Among the known smallcaps, Punj Lloyd posted a net profit of Rs 944.10 crore for March quarter after reporting net losses for
five quarters before that
Punj Lloyd Group is a diversified international conglomerate offering EPC services in energy and infrastructure segments besides having
engineering and manufacturing capabilities in the defence sector.
Usha Martin, Sun Pharma Advanced Research Company (SPARC) and
Walchandnagar Industries are three other companies that saw a turnaround during the quarter gone by.
Usha Martin is currently exploring the
sale of its steel business
Reports said the Kolkata-based company is selling its steel facility in order to pare its debt, which stood at Rs 3,723 crore at the end of
Usha Martin reported net profit of Rs 11.40 crore for Q4FY18, whereas Sun Pharma Advanced Research and Walchandnagar reported net profits
of Rs 2.50 crore and Rs 2.10 crore, respectively, after posting losses for five previous quarters
Others including Arshiya, Nitco, Tantia Construction, Standard Industries, Spice Mobility, Mangalam Tiber Products, Onelife Capital
Advisors, MVL, Regency Ceramics, GTN Industries, WS Industries, Kavveri Telecom and Neulands Global Industries also posted positive bottom
line numbers for Q4 after reporting losses for the previous few quarters.
Among the above-mentioned stocks, shares of Arshiya, Usha Martin,
Nitco and SPARC have rallied 52 per cent, 89 per cent, 117 per cent and 162 per cent in last two years
Shares of MVL, Spice Mobility and Mangalam Tiber Products have risen up to 52 per cent during the same period
However, other stocks have tumbled up to 55 per cent in last two years.
As a whole, India Inc saw sales growth of more than 10 per cent YoY
While gross margins contracted due to rising commodity prices, this was offset partly by positive operating leverage.
Ebitda growth improved
to around 19 per cent YoY in Q4, while the interest burden fell marginally, with interest expense accounting for around 22 per cent of
Ebitda in Q4 against 23.4 per cent reported for the year ago period
However, profit growth slowed to around 11 per cent YoY despite a low base, says a report by IIFL
The brokerage further said sales growth has been extremely weak for the smallcap companies for several quarters now, while for the
largecaps it rose sharply.
Aggregate sales have grown around 14 per cent YoY on an average over the past five quarters for largecap
companies compared with only 5 per cent YoY growth for smallcaps
Edelweiss Securities in a report said March quarter was another disappointing quarter with profits for its coverage universe contracting 19
per cent YoY (versus forecast of over 13 per cent YoY).
(Disclaimer: The stocks mentioned in the article are for information purpose only
Consult your financial advisor before buying or selling the stock.)
