Centre for Monitoring Indian Economy (CMIE) has reviewed its estimation for net profit of the manufacturing segment during the September quarter downwards, mainly because of the poor show of petroleum products biz.
In its monthly appraisal, it stated, “We now expect net profit to fall by 5.7 per cent, against our earlier expectations of a 34.2 per cent rise. This is on account of a downward revision in the profit forecast of the petroleum products industry.”
But, CMIE anticipates the manufacturing division to continue its growth impetus by recording a 20.7% increase in net sales during the September quarter.
A steep reduction in profit of the petroleum products business and big losses to be incurred by the aviation business are likely to confine the development in business profit during the second quarterly period.
The report signalizes that exclusion of 5% import duty on crude during the month of June was likely to have a optimistic impact on the earnings of petroleum products business during the existing quarter.
“But, a sharp rise in crude prices in July prompted us to revise our forecast for crude prices upwards for the September quarter and for the full fiscal,” it said.
“We expect the rise in crude prices to offset the impact of duty removal. The industry is now expected to report a steep 56.7 per cent fall in net profit in the second quarter as against 33.1 per cent fall expected earlier,” CMIE added.
CMIE estimates net profit development of manufacturing division (apart from petroleum products) during the quarter almost unaltered at 32.5%.