Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
India Inc: Growth mode - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jul 18, 2003

    India Inc: Growth mode

    FY03 has widely been hailed as a good year for India Inc. We dug up data on our own Quantum Universe of 350 companies to further give credence to this fact. Currently, this universe represents over 90% of BSE market capitalization. This is what we found.

    (Rs m) FY02 FY03 % Change
    Net Sales 6,994,042 7,367,328 5.3%
    Net Profit 512,141 635,514 24.1%
    Gross Profit 1,454,534 1,705,728 17.3%
    Gross Profit Margin 20.8% 23.2%  

    In the table above, we see that while the Universe topline has grown by 5%, the bottomline has gone up by a healthy 24% over the previous year. This clearly indicates that even though globally 2002 was not a year to remember, India Inc. continued to show a healthy growth rate. Even at the gross profit level the group has done well over the previous period, indicating that operationally too, India Inc. had continued to tread the path of efficiency.

    The government has also done its fair bit in giving a boost to the economy. During the Union Budget – 2003, the government took key initiatives like infrastructure development, power reforms and securitisation bill which saw fortunes turning for sectors like steel, cement and power. Apart from this, decrease in interest rates also saw debt restructuring and consequently, loss making manufacturing companies posting profits (steel companies in particular). Banks too have seen an upturn in their retail portfolio owing to the interest rate windfall. The Securitisation Act is likely to further strengthen the sector’s investment abilities.

    All this bodes well for the current year too. As per the CMIE, The GDP is also expected to grow at a healthy 6.5% during FY04, as against 5.6% in the previous year. Apart from this, the country is also witnessing near normal rainfall, which has been confirmed by the Indian Metrological department (IMD). Normal rains means that the agricultural sector would have a better year as compared to the recent lacklustre years.

    The markets have also responded well to the commendable performance of India Inc., as a result of which the Sensex is currently trading at a P/E multiple of 13.2x FY03 earnings. Even if the Sensex stocks clock an average 15% bottomline growth, forward P/E stands at 11.5x. In this light, it does look that this time around, there is a fundamental reason behind this bullish tone. Given the fact that the environment looks conducive for growth, investing in India Inc. should prove to be fruitful in the long run.



    Equitymaster requests your view! Post a comment on "India Inc: Growth mode". Click here!


    More Views on News

    How to Ride Alongside India's Best Fund Managers (The 5 Minute Wrapup)

    Jun 10, 2017

    Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.

    Why NOW Is the WORST Time for Index Investing (The 5 Minute Wrapup)

    Aug 18, 2017

    Buying the index now will hardly help make money in stocks even in ten years.

    Trump Takes a Beating (Vivek Kaul's Diary)

    Aug 18, 2017

    Donald J Trump, a wrasslin' fan, took a 'Holy Sh*t!' blow on Tuesday.

    How To Read Your Mutual Fund Account Statement Correctly (Outside View)

    Aug 17, 2017

    PersonalFN simplifies the mutual fund account statement for you.

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process) (The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 18, 2017 03:37 PM