Large cos fare better in Q4, smaller firms worse

Mumbai: A large number of companies at the bottom of the pyramid in terms of net sales continue to fare badly while top companies with net sales above Rs 250 crore have done well in the January-March quarter, an analysis of their year-on-year sales and profit , done by Care Ratings showed.

A sample of 2,145 companies, excluding banks, finance, oil & gas and refineries, segregated according to the net sales showed 557 companies with net sales above Rs 250 crore in the fourth quarter registered higher sales growth but their net profit growth slowed year-on-year.

But for smaller companies with net sales of less than Rs 250 crore, the performance has worsened in terms of both sales and profit. Further 197 companies with net sales of Rs 125 crore to Rs 250 crore saw lower sales and profit.

Sales were down for 502 companies with net sales of Rs 25 crore to Rs 125 crore but their profit grew at 6.2 per cent.

Another set of 383 companies with net sales in the range of Rs 2.5 crore to 25 crore registered decline in sales while their profit data is not available. A total of 506 companies with net sales of less than Rs 2.5 crore also registered sharp decline in net sales year-on-year.

The fourth quarter corporate performance for over 2,646 listed companies shows their cumulative sales and profit registered growth year-on-year but expenditures rose sharply on account of higher raw material cost and employee cost.

The results analysis of 2,646 companies showed that the aggregate net sales grew at 9.4 per cent compared with 8.4 per cent in fourth quarter of  FY18. The aggregate net profits of these companies registered a growth by 8.9 per cent, higher than the 7.5 per cent growth in the fourth quarter of FY18.

The profit margins more than doubled from 2.3 per cent in FY18 to 4.9 per cent in FY19. However, expenditures grew by 9.5 per cent compared with the 6.3 per cent growth in the comparable quarter last year.

Cost of raw material accounted for nearly 38 per cent of the total expenditure in the fourth quarter of FY19. Employee cost grew at a lower rate of 8.1 per cent over 13.5 per cent growth last year.