Amid the rising interest rate and input price squeeze, there is a silver lining for India Inc.
The first quarter results bear this out, with several companies seeing a boost in ‘other income' on account of better treasury yields and investment gains on surplus fund deployment.
This is visible across sectors as diverse as banking, capital goods, automobiles, steel, pharma, logistics and petro-chemicals.
Take the case of BHEL. Increased interest income, coupled with higher margins on project execution helped the firm shore up its bottomline in the quarter.
So, despite a lacklustre 10 per cent revenue growth, the equipment major managed a 22 per cent jump in net profits.
Beats forecasts
For RIL, the drop in production from the D6 KG block led analysts to forecast revenues to the tune of Rs 77,000 crore in the quarter.
But it rose to over Rs 81,000 crore, with the ‘other income' factor bringing in around Rs 1,078 crore, a 49 per cent jump.
This has been attributed to a larger cash balance and increased interest income.
Maruti too managed to blink away the blues of high raw-material costs and foreign exchange volatility with a Rs 80-crore year-on-year jump in ‘non operating income'.
This led to net profit surging over 18 per cent despite a tepid top-line growth of just over 3 per cent.
Higher treasury yields and better gains on investments offered the boost.
Syndicate Bank clocked a 29 per cent increase in Q1 net profit helped mainly by a 35 per cent surge in ‘other income', including higher fee based income and trading profits.
Container Corporation of India posted a 21 per cent hike in its bottomline on the back of just a 4 per cent increase in sales, driven by a 64 per cent boost in ‘other income' through higher interest income and dividends from its joint ventures.
Doubles for Aventis
Aventis Pharma saw quarterly net profit beat street expectations and rise 17 per cent, helped again by ‘other income' that more than doubled during the quarter.
SAIL too reported ‘other income' at Rs 463 crore, up from Rs 386 crore last year, even though profits were dented by coking coal prices.