The first quarter of the current financial year has witnessed a marked dip in the profits of major firms engaged in the infrastructure sector, but IT companies registered a turnaround in their growth prospects.
While absence of major infrastructure projects is said to be one reason behind the slow pace of growth of State headquartered infrastructure companies, high interest rates and other factors further added to their woes. Lanco Infratech Limited, for instance, posted a loss of Rs. 441 crore for the first quarter ended June 30, compared to profit of Rs. 13.8 crore during the same period a year ago.
The company attributed this negative development to high interest costs and losses on account of foreign exchange to the tune of Rs. 230 crore. Another infrastructure company, Ramky Infrastructure too registered drop in the net profit during the first quarter though it had registered 14 per cent rise in the net sales. Ramky Group chairman Ayodhya Rami Reddy described the results as quite encouraging as the company could make it in spite of the turbulence in the market, infrastructure segment in particular.
Fluctuations in foreign exchange, however, augured well for the IT companies translating into major gains for them. Mahindra Satyam’s consolidated net profit surged 56.3 per cent to Rs. 352 crore during the quarter on the back of the forex gains.
Its chairman Vineet Nayyar said, “the ghost of the past has been exorcised and we have the competitive edge, healthy and willing to compete.”
City-based digital marketing firm Ybrant Digital Limited registered impressive growth in net profit at Rs. 60 crore, up 36 per cent, mainly on account of the forex gains. Leading public sector bank, Andhra Bank too registered close to 6.2 per cent dip in net profit during the period, for a different reason though. The net stood at Rs. 362 crore compared to Rs. 385 crore of the corresponding period previous fiscal and this, according to its chairman and managing director B.A. Prabhakar, was due to decline in credit off-take and higher provisioning towards non performing assets that dragged the net. The credit off-take, particularly on the corporate loans front, had been tardy during the period.
