Corporate profits to rise 22.8 per cent in fiscal 2009-10: CMIE
16 Oct 2009
Corporate India is expected to end fiscal 2009-10 with a 22.8 per cent growth in after-tax profit (net profit) although aggregate sales growth will be a meager 4.1 per cent, the Centre for Monitoring Indian Economy (CMIE) said in its latexes estimates.
"Corporate sales growth will average at a meager 4.1 per cent in 2009-10. At the same time, PAT will rise by a robust 22.8 per cent," CMIE said in its latest report on the state of the Indian economy.
The manufacturing sector (excluding petroleum sector) will post a higher net profit of 24.3 per cent, due mainly to low prices of raw material, CMIE said. Profit margins in the services sector - both financial and non-financial - is projected to rise at an even higher rate of 32.2 per cent, the CMIE said.
CMIE attributed the lower growth in sales to a drying up of export demand amidst falling global liquidity and postponement of purchase decisions by the domestic consumer. The report also cited a general fall in commodity prices as another reason why corporate India took a hit on sales.
"From 35 per cent in the first-half of 2008-09, its sales growth slumped to 12.1 per cent and 0.1 per cent in December 2008 and March 2009 quarters, respectively," CMIE said.
CMIE had earlier projected that real GDP growth in the economy in the October-December 2009 quarter to fall to 4.6 per cent, down from 5.9 per cent projected for the July-September quarter and the lowest growth in the past 2-1/4 years.
It has also projected consumer price inflation at 10.5 per cent at the end of the current quarter, its highest level in a decade.
