India Inc's PAT margins likely to fall: CMIE- Business News
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India Inc's PAT margins may drop

The domestic corporates' profit growth is also likely to be restricted to 6.8 per cent in FY11, owing to the fall in profits in the second quarter of the 2010-11 financial year.

 PTI   
  • New Delhi,  October 18, 2010  
  • |  
  • UPDATED   14:47 IST

India Inc's profit after tax (PAT) margins are likely to shrink to 8.1 per cent in the current financial year, against 8.9 per cent in the year-ago period, an economic think-tank forecast in its report.

The domestic corporates' profit growth is also likely to be restricted to 6.8 per cent in FY11, owing to the fall in profits in the second quarter of the 2010-11 financial year, the report from Centre for Monitoring Indian Economy (CMIE) said.

According to CMIE, while profits are expected to rise 23.3 per cent and 16.6 per cent, respectively, over the remaining two quarters of the financial year, the fall reported in the June quarter would restrict the profit growth to 6.8 per cent.

"We expect the growth in corporate profit to pick up in the second-half of 2011. The petroleum products and sugar industry will return to profit from the December 2010 quarter," the report said.

This would bring an improvement in the profit performance of Corporate India, it said, adding, "the fall reported in June quarter will restrict the growth in corporate profits in FY11 to 6.8 per cent."

Sales are, however, likely to rise 18.3 per cent in the reporting financial year, much faster compared to the 5.9 per cent which India Inc registered in FY10, CMIE said.

Both the manufacturing sector and non-financial services would show an acceleration in growth at 20.5 per cent and 15.2 per cent, respectively, during the year, it said.