Financial Daily from THE HINDU group of publications
Sunday, Feb 09, 2003
Financial Daily from THE HINDU group of publications Sunday, Feb 09, 2003 |
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Performance Industry & Economy - Economy Corporate - Performance Sept - Dec '02 quarter report card: The black and red tally of 332 cos G. Madhan
IN the September-December quarter 2002, 187 companies managed to turn around and moved from losses to profit from that of the corresponding prior period. A total of 145 companies, on the other hand, moved in the reverse direction, with a splash of red in their earnings card. Steel producers, automobile companies and textile manufacturers featured among those that have engineered a turnaround. On the other hand, a few small-size software companies, pharmaceutical manufacturers, sugar producers and telecom cable companies moved from black to red. Out of 2,000 companies that have reported their financial performance in the recently ended quarter, 17 per cent of the companies witnessed a swing in their fortunes. Some of the prominent companies that moved from red to black include Tata Engineering, Jindal Iron & Steel, Escorts and Century Textiles. Other leading companies that moved from black to red include BPL, ITI, Sterlite Optical Technologies, Jenson & Nicholson and Punjab Communications. Steel sector as a whole has benefited from the increase in finished product prices. Large companies such as Tata Steel manage to post sharp jump in the earnings while companies such as SAIL and Ispat managed to cut down the losses. The list of turnaround candidates not only includes large manufacturers but also secondary steel producers. These include Shree Precoated Steels, Hindustan Wires, Raipur Alloys, Pithampur Steels and Panchamahal Steel. A few cement companies such as Ambuja Cement Eastern and Saurashtra Cement too moved from red to black. Their turnaround has been despite pressure on selling prices and can be attributed primarily due to the location advantages and rise in exports. Textile manufacturers Bombay Dyeing, Lakshmi Mills, Sri Nachammai Cotton Mills, Suryalata Spinning Mills and Vanasthali Textile Industries also ended the quarter in the positive territory. Mid-sized pharma companies such as Torrent Pharma, Lyka Labs and Vorin Labs also moved into the positive territory. Auto companies too witnessed impressive numbers in this quarter. Companies that have turned the corner include Bajaj Tempo, Majestic Auto and Brakes Auto. Some in the scooter segment like Maharashtra Scooters and tractors like Eicher though suffered. Drop in the demand in the scooter segment can be attributed to the losses of the former. Drop in tractor sales can be attributed to the losses of the latter. Pricing pressures and reduction in volumes affected telecom cable companies too. Quite a few telecom cable companies have moved into red this quarter. This includes RPG Cables, Universal Cables and Birla Ericsson Optical. In the case of IT companies, losers include several small sized Soffia Software, Mars Software, LCC Infotech, Kushagra Software, Computer Skill and IEC Software. The tough scenario in the market for services export favouring larger companies appears to have hit them hard. Among the pharma manufacturers Kopran and RPG Life Sciences moved from black to red.
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