Manufacturing Companies In India Post Low Profits

Profits in fiscal year 2006, were the lowest of the past four years for manufacturing companies in India. A drop in sales growth and rise in interest burden in 2005-06 have dented the net profit growth of India Inc., according to a study released by the Business Standard Research Bureau.

Results from the 1,450 companies studied, showed that the companies have posted an aggregate net profit growth rate of 26% from in 2005-06. A sample of 1,354 companies showed that the highest net profit growth rate of 40% was recorded in 2004-05, according to an May 22 article on business-standard.com

In 2003-04, the growth rate was 39% and in 2002-03, 36%. In 2001-02, the growth rate was 3.69%.

The study concluded that total sales had dropped to 19% in 2005-06 as compared to 21% in 2004-05, while the aggregate interest rose 5% against a 3% decline in 2004-05.

Industries that fared well were non-ferrous metals, cement, steel, bearings, hotels, automobiles tractors, paper and cotton textiles recording over 100% growth in net profits.

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