India Industry Profile First Quarter 2007

The financial performance of corporate India for the quarter ended March 2007 is turning out to be as per expectations. About two-fifths of the companies accounting for more than half the revenues of the manufacturing sector report 26.1% growth in revenues. These companies reported a 38% growth in net profits and a net margin of 9.6%.

Cement, software, alkalis and bearings have been the star performers with respect to earnings growth in the March 2007 growth. Each expanded earnings by more than 40%. Cement was the star performer with a whooping 98% growth in net profits on the back of steep rise in realizations during the past one year. Among those who witnessed declining profits were sugar, fertilizers, and pumps. The sugar sector witnessed steep decline in profits due to falling prices on account of bumper domestic output and inability of sugar mills to export surplus production. The fertilizer sector was affected by the poor performance of nitrogenous fertilizer companies.

A relief to the corporate sector came from the monetary authority of the country in the form of non-increases in interest rates in its annual policy statement on April 26, 2007. Interest rates are not likely to rise further.

Another relief came in the form of permission to hedge price risk. The Reserve Bank of India allowed domestic producers and industrial users of base metals such as aluminum, copper, lead, nickel, and zinc to hedge their price risk in international exchanges, such as the London Metal Exchange (LME). It may be noted in this context that Indian metal prices have a very high co-relation to international metal prices.

Aruvian Research presents an analysis of India Industry Profile First Quarter 2007 which analyzes the performance of all the major industries of India during Quarter One, 2007. Each industry's analysis includes an outlook, industry production statistics, industry price trends, export/import situations, segment analysis, index analysis, and a complete financial analysis of the industry.