The Hindu Business Line : Non-oil cos' export earnings surge

MARUTI exported more cars in 2003-04. Tata Motors started exports of its Indica to United Kingdom. Auto component exporters too had a good time. Struggling consumer durable firms such as BPL and Whirlpool too were able to increase their export efforts. With many such listed Indian companies joining the export bandwagon, the dollar registers have started ringing faster.

Listed companies, excluding oil firms, have turned in an impressive performance on the foreign exchange earnings front. The aggregate net foreign exchange earnings of 320 companies that are part of the S&P CNX 500 Index have risen 48 per cent in 2003-04. Net foreign exchange earnings are excess of revenue earned in foreign exchange over payments in foreign exchange.

The surge in growth is on the back of an equally impressive 37 per cent rise recorded in 2002-03. The trend of exports rising faster than imports has boosted growth in net foreign exchange earned by these companies. The performance is impressive considering India's surplus from trade in goods and services improved by only 10 per cent in 2003-04.

The performance of listed companies however does not appear impressive when numbers of oil companies are also aggregated. Then, net foreign exchange earnings turn negative. In addition, this negative number increased marginally in 2003-04 in contrast with improvement in current account position for the Indian economy.

Exports of non-oil companies rose 31 per cent in 2003-04, nearly double their growth in net sales. On the expenditure side, foreign exchange payments of dividends and royalty have declined. In contrast, technical fees payments and travel expenses recorded sharp growth.

Capital payments in foreign exchange have also risen steeply by about 200 per cent for oil companies. Capital outflow in foreign exchange of non-oil companies rose only 10 per cent. This too has helped listed non-oil companies earn more foreign exchange for the country.

The contribution to the improved export earnings performance has come not only from software and healthcare companies alone. Topping the list in terms of contribution to growth are companies such as Adani Exports and IPCL. Companies such as United Phosphorous, Bajaj Auto, Essar Steel, Orchid Chemicals and KEC International have also reported significant rise in their net foreign exchange earnings.

On the other hand, companies such as VSNL, ITC, GE Shipping, Saw Pipes and Ispat Industries reported sharp fall in their net foreign exchange earnings. Apart from oil companies, biggest guzzlers of foreign exchange include Hindalco, Hero Honda Motors, Finolex Industries, Apollo Tyres and a host of fertilizer companies such as Tata Chemicals.

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