Skip to main content

CII: Growth in sales down from 8.8% to 2.8% in a year, corporate profits go into negative, wither Make in India?

By Rajiv Shah
The Confederation of Indian Industries (CII), India’s powerful organization of top corporate giants, has declared that the “corporate results at the end of first quarter of current fiscal (2015-16) painted a rather gloomy picture, as the financial performance of Indian companies, especially manufacturing sector firms, deteriorated.”
In a just-released analysis, the CII said, “A lower than expected 7.0 per cent GDP growth in the reporting quarter could not salvage the cause, even as the rate cuts by the RBI provided some respite.” It added, even the ambitious Make in India campaign of Prime Minister Narendra Modi has failed to make a difference, with India “struggling to keep face in the international trade arena.”
Giving an analysis of the financial performance during the first quarter of 2015-16 of 2,422 manufacturing companies and 1167 service firms extracted from the Ace Equity database, the CII said, “Growth in net sales on an aggregate basis stood at a measly 2.8 per cent at the end of first quarter of 2015-16, as compared to 8.8 per cent in the same quarter a year ago.”
“The growth of net sales for manufacturing firms was as low as 0.5 per cent during the quarter as compared to 8.8 per cent in the same quarter a year ago”, the CII said, adding, “Firms in the service sector fared no better, with their net sales growing at a softened pace of 6.4 per cent in the first quarter of current fiscal as compared to a growth of 8.8 per cent in the same quarter in the previous year.”
“The low net sales of firms were reflective of the lack of ample demand in the economy, a scenario that has been persistent for quite some time now”, the CII commented, adding, “The slowing demand in the external markets has been doing no good either.”
Pointing out that the total expenditure “decelerated sharply” to 3.1 per cent in the reporting quarter as against a growth of 11.2 per cent in the corresponding period of 2014-15, the CII said, this “to some extent mitigated the impact of the current bout of economic crisis characterized by falling growth in net sales”.
But it said, “The reduction was not large enough to provide cushion to the bottom- Among the major reasons for reduction in expenditure included reduction in in the interest rates by the Reserve Bank of India (RBI), on one hand, and raw material cost, on other hand, reduced expenditure costs, the CII said. It added, despite this, the profit after tax (PAT) contracted by 9.2 per cent in the April-June 2016 quarter as compared to a growth of 25.2 per cent in the first quarter of 2014-15.”
It added, “PAT contracted for manufacturing firms by 18.6 per cent in the first quarter of current fiscal as compared to a growth of 33.9 per cent in the same quarter of last year. The service sector also lagged behind as PAT witnessed de-growth by 0.8 per cent in the reporting quarter as against a growth of 18.3 per cent seen in the corresponding quarter of last year.”
The CII further said, “Operating profits too followed fairly similar trends and on an aggregate level, the growth in operating profits fell to the tune of 4.3 per cent in the first quarter of 2015-16 against a growth of 10.9 per cent over.”

Comments

TRENDING

India under Modi among top 10 autocratizing nations, on verge of 'losing' democracy status

By Rajiv Shah
A new report, prepared by a top Swedish institute studying liberal democracy, has observed that there has been a sharp “dive in press freedom along with increasing repression of civil society in India associated with the current Hindu-nationalist regime of Prime Minister Narendra Modi.” The report places India among the top 10 countries that “have autocratized the most”. Other countries that have been identified for rolling towards autocracy are -- Hungary, Turkey, Poland, Serbia, Brazil, Mali, Thailand, Nicaragua and Zambia.

Savarkar 'criminally betrayed' Netaji and his INA by siding with the British rulers

By Shamsul Islam*
RSS-BJP rulers of India have been trying to show off as great fans of Netaji. But Indians must know what role ideological parents of today's RSS/BJP played against Netaji and Indian National Army (INA). The Hindu Mahasabha and RSS which always had prominent lawyers on their rolls made no attempt to defend the INA accused at Red Fort trials.

Gujarat link of controversial US doctor who 'forced' WHO quiz Trump's wonder drug

By Rajiv Shah
A top American doctor, Sapan Sharankishor Desai, born and raised in the “affluent” North Shore (Chicago) region of Illinois by Indian parents, at one point of time involved in NGO activity through  dedicated to “improving” the lives of the impoverished in Gujarat, is in the eyes of a major international storm following his paper (retracted) in a “Lancet” questioning Donald Trump-promoted drug hydroxychloroquine.

Border conflict? RBI nod India's 'brotherly' help to China internationalise its currency

By Bhabani Shankar Nayak*
In the middle of a global pandemic, China started an unprovoked border conflict with India. It unraveled trust deficit and ties between the two neighbours. As thousands of Chinese troops tried occupying Indian territory, the Narendra Modi-led BJP government directs the Reserve Bank of India (RBI) to allow the Bank of China to start regular banking services in India. The Bank of China will now operate in India like any other commercial banks.

RSS supremo Deoras 'supported' Emergency, but Indira, Sanjay Gandhi 'didn't respond'

By Shamsul Islam*
National Emergency was imposed on the country by then Prime Minister Indira Gandhi on June 25-26, 1975, and it lasted for 19 months. This period is considered as ''dark times' for Indian democratic polity. Indira Gandhi claimed that due to Jaiprakash Narayan's call to the armed forces to disobey the 'illegal' orders of Congress rulers had created a situation of anarchy and there was danger to the existence of Indian Republic so there was no alternative but to impose Emergency under article 352 of the Constitution.

Dalits in India, Blacks in US suffer 'similar' humiliation: Macwan drafts letter to Trump

Counterview Desk
Well-known human rights activist Martin Macwan, recipient of the prestigious Robert F Kennedy Human Rights Award in 2000, has drafted an open letter to US President Donald Trump following the disturbing turn of events with the murder of George Floyd, leading to widespread protests in the US. He has sought signatures of concerned citizens before sending it to Trump.

Clean chit to British rulers, Muslim League? Karnataka to have Veer Savarkar flyovers

By Shamsul Islam*
The BJP government of Karnataka led by BS Yediyurappa is going to honour Hindutva icon VD Savarkar by naming two of the newly built major flyovers in Bangalore and Mangalore after him. There was a huge uproar against this decision of the RSS-BJP government as many pro-Kannada organisations with opposition parties and liberal-secular organizations questioned the logic to ignore so many freedom fighters, social reformers and others from within the state.

Hurried nod to Western Ghat projects: 16 lakh Goans' water security 'jeopardised'

Counterview Desk
Taking strong exception to "virtual clearances" to eco-sensitive projects in the Western Ghats, the National Alliance of People’s Movements (NAPM) in a statement has said urged for a review of the four-lane highway, 400 KV transmission line and double tracking of the railway line through the Bhagwan Mahavir Wildlife Sanctuary and Mollem National Park in Goa.

Disturbing signal? Reliance 'shifting focus' away from Indian petrochemical sector

By NS Venkataraman*
Reliance Industries Ltd (RIL), a large Indian company, has expanded and grown in a spectacular manner during the last few decades, like of which no industrial group in India has performed before. RIL is now involved in multi various activities relating to petroleum refineries, petrochemicals, oil and gas exploration, coal bed methane, life sciences, retail business, communication network, (Jio platform) media/entertainment etc.