Tata Motors, HCL Top FY13 Profits In Just 9 Months

NEW DELHI: Tata Motors, Sesa Sterlite, HCL Technologies and Tech Mahindra are among the companies in the BSE 200 index whose net profits during the first nine months of FY14 have exceeded their FY13 full year profits.

An ETIG analysis shows two out of every nine companies that reported net profit during the first nine months of FY14 in the BSE200 index have exceeded their FY13 full year profits. These companies have been able to surpass their previous year’s profits in less than a year on account of either sustained sales growth or better operating and non-operating cost management or both.

This is despite the slowdown and the fact that growth last fiscal was at a decadal low and with indications that it will be below 5% this fiscal too. Many of the companies which managed to top their FY13 profits are either medium or small companies based on their profit potential.

For instance, of the top 10 companies in the sample based on their nine-month net profit, only two, including Tata Motors and Sesa Sterlite, reported higher figures relative to the full-year profits for the previous fiscal. Tata Motors is reaping the benefits of higher global demand for its Jaguar and Land Rover models while Sesa Sterlite’s profit was boosted due to the merger of two companies — Sesa Goa and Sterlite Industries.

Of the top 50 companies in the sample, only seven reported higher profits in the first three quarters of FY14. Of these two belonged to the IT sector, including HCL Technologies and Tech Mahindra. A weak rupee coupled with better outsourcing demand from the US clients helped these software service exporters.

The acquisition of Axon PLC five years ago has helped HCL Technologies expand its presence in the enterprise and transformational information technology outsourcing solutions.

For Tech Mahindra, a merger with Satyam Computer Services has transformed the firm into a multi-vertical services provider form being a telecom-centric player. This has boosted its bottomline. Telecom services provider Idea Cellular figured in the list helped by improving tariff scenario and data usage among its subscribers.

Among mid-sized companies, auto ancillary makers such as Motherson Sumi, Amara Raja, and Bharat Forge and pharma companies including Strides Acrolab, Aurobindo Pharma, IPCA Laboratories feature in the list. Over the last few years, Aurobindo Pharma and IPCA have successfully transformed from being an API company to a formulation firm.

Deeper penetration of the existing portfolio and new launches have helped the companies to scale up US revenue over the last two years. A weaker rupee too helped the companies in the first three quarters of FY14. Aurobindo’s focus on niche segments such as injectibles, respiratory, controlled substances should support growth going forward. It has a pipeline of 308 drug filings, out which 120 are with US.

(With inputs from Joseph Pereira)