India Inc Puts up Worst Profit Growth in 5 Qtrs

High input costs, interest rate spike keep Sept quarter growth at just 4.4%

    Net profit growth at India Inc slowed dramatically in the just ended quarter as raw material costs and interest charges zoomed, an analysis of corporate results released so far shows. Results for about 494 companies shows that they posted a combined net profit growth of just 4.4%, the worst in the past five quarters. Sales grew at a much better pace, 27%, but operating profit margins fell, while financing costs, including forex losses, jumped 53%. This restricted the growth in profit before depreciation and tax (PBDT) at just 8%. The rupee depreciation was a key factor that impacted profit in a big way as companies with foreign currency loans faced a steep jump in interest costs besides mark-tomarket losses. Among those hit were MRPL, Chennai Petro, United Phosphorous, Sintex and Idea Cellular. The deteriorating business environment and rising input costs impacted the performance of Exide Inds, JSW Steel, Crompton Greaves. Cairn India's profits halved as it provided for one-time payments to ONGC. On the other hand, the infotech industry posted a mere 9.6% yearon-year growth in net profit according to the aggregates of 39 IT firms. Interest rate sensitive industries such as real estate, construction, consumer durables turned out to be underperformers. Similarly, weak market conditions and steep raw material costs took a toll on steel, auto ancillaries, textiles and packaging industries. One out of every five companies posted a loss in the September 2011 quarter. One out of every 10 posted a loss versus a profit in the yearago September quarter. The number of companies able to grow their profits from last September quarter at 217 was only slightly higher than those unable to do so. The better performers include Ultratech Cement, Petronet LNG, Hindustan Zinc, Torrent Power, Grasim Industries. In spite of the rising interest rates and worries about NPAs, a number of banks were able to improve numbers compared with the year ago period. The profit of BoM jumped 92%, while IndusInd Bank, Syndicate Bank, Federal Bank, YES Bank, HDFC Bank and Axis Bank posted 25%-plus growth. But some other public sector banks, such as UBI, disappointed. A few industries including cement, chemicals, diamond & jewellery, entertainment & media, FMCG, pharma, Infotech and capital goods were able to post numbers better than the previous quarter. A number of key results are yet to come, which could change the aggregate readings considerably. However, the weak undertones in the industry and economy are becoming more evident. The leading infra and engineering major L&T reduced its order intake guidance for FY12 on slowing investment. India's official GDP growth target has already been revised to 7.6% from initial 8% by the RBI, while the soaring subsidy bill, thanks to high oil prices and weak rupee, means the fiscal deficit target of 4.6% will be missed.

India at ‘Extreme’ Risk from Climate Change

Kolkata tops global climate change risk rating; Chennai, Mumbai and New Delhi listed as 'high risk' areas

A third of humanity, mostly in Africa and South Asia, face the biggest risks from climate change but rich nations in northern Europe will be least exposed, according to a report released on Wednesday. 
Bangladesh, India and the Democratic Republic of Congo (DRC) are among 30 countries with "extreme" exposure to climate shift, according to a ranking of 193 nations by Maplecroft, a British firm specialising in risk analysis. 
Five Southeast Asian nations — Indonesia, Myanmar, Vietnam, the Philippines and Cambodia — are also in the highest category, partly because of the rising seas and increasing severe tropical storms. 
Maplecroft's tool, the Climate Change Vulnerability Index (CCVI), looks at exposure to extreme weather events such as drought, cyclones, wildfires and storm surges, which translate into water stress, loss of crops and land lost to the sea. 
How vulnerable a society is to these events is also measured, along with a country's potential to adapt to future climate change-related hazards. 
Of 30 nations identified in the new report as at "extreme" risk from climate change, two-thirds are in Africa and all are developing countries. Africa is especially exposed to drought, severe flooding and wildfires, the report says. 
"Many countries there are particularly vulnerable to even relatively low exposure to climate events," said Charlie Beldon, coauthor of the study. 
Weak economies, inadequate healthcare and corrupt governance also leave little margin for absorbing climate impacts. 
At the other end of the spectrum, Iceland, Finland, Ireland, Sweden and Estonia top the list of nations deemed to be least at risk. With the exception of Israel and oil-rich Qatar and Bahrain, the 20 least vulnerable countries are in northern and central Europe. China and the US, the world's No1 and No2 carbon emitters — are in the "medium" and "low" risk categories, respectively. In a parallel analysis of major cities at risk, Maplecroft pointed to Dhaka, Addis Ababa, Manila, Kolkata and the Bangladesh city of Chittagong as being most exposed. 
Three other Indian metropolitan areas — Chennai, Mumbai and New Delhi — were listed as being at "high" risk. 
"Vulnerability to climate change has the potential to undermine future development, particularly in India," Beldon observed. 
Recent studies — reviewed in a special report by the UN's Intergovernmental Panel on Climate Change (IPCC), due out next month — point to strengthening evidence of links between global warming and extreme weather events.

THAT SINKING FEELING A devotee washes his clothes after a ritual dip in the polluted waters of Yamuna in New Delhi — REUTERS