|Rainy days and Mondays|
|Wednesday, 01 June 2011 00:00|
Analysts who had downgraded the earnings of Sensex companies to R1,190-1,216 for FY12, from R1,252 a few months ago, may just have to get back to their excel sheets if Monday’s results are anything to go by. Of the 50 companies which declared their results on Monday, 12 showed a fall in profit for the full year, and a lot more showed a fall in Q4 profits.The biggest losses, not surprisingly, came from the oil sector where ONGC and IOC declared their results on Monday. Revenues for the oil majors rose from R1,65,578 crore in Q4 FY10 to R2,02,091 in Q4 FY11, and profits fell from R11,225 crore to R9,317 crore thanks to under-recoveries rising substantially, and the government asking the oil PSUs to pay a higher share of this. ONGC’s R12,135 crore share of subsidies in the fourth quarter was almost equal to the total of past three quarters—it was R4,999 crore in the fourth quarter of 2010. This took ONGC’s subsidy payout in the full year to R24,892 crore, more than double than the previous year. Though ONGC sold each barrel of crude for $108.9 in Q4 as compared to $79.2 a year ago, it ended up with just $38.75 in hand—it got $51.42 in Q4 FY10. All eyes are on what the Group of Ministers, which meets later this week, proposes since estimates are that the under-recoveries may double this year.
With RCom’s profits falling by 86% (despite a change in accounting practices) and Bharti’s by 14% (Idea has postponed its results till June), Q4 profits for the two listed telcos have fallen from R3,263 crore in 2010 to R1,568 crore in 2011—full year profits fell from R13,631 crore in 2010 to R7,391 crore in 2011. While the African operations weighed on Bharti’s bottom line, high interest costs were the culprit in RCom’s case. Apart from the financials, more problematic was the sharp fall in the monthly ARPU, which fell from R220 in 2010 to R194 for Bharti and from R158 to R116 for RCom—minutes of usage fell from 468 a year ago to 449 in March 2011 for Bharti and from 333 to 262 for RCom.
In the real estate sector, Omaxe reported a fall of 17% in profit and 22% in top line revenues on Monday. Among the real estate firms that declared results last week, DLF, the country’s largest developer, reported a 19% fall in profit for the quarter ended March this year as compared with the same quarter last year. Unitech, the second largest developer, reported 16% decline in net profit during the same period. In the auto sector, while Mahindra & Mahindra declared a 6.3% hike in profits in Q4, the future may not be as bright, as dealers for all auto firms are reporting huge pile up in inventories, and even the management of Maruti Suzuki has underlined the fact that fewer enquiries at showrooms were being converted into sales.