Tag Archives: CMIE

Manufacturing Division Profit Seen Descending By 5.7% During Q2, Says CMIE

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%.

Steel Rates To Climb Further From Oct This Year, Says CMIE

As per CMIE report, domestic steel giants are likely to increase rates further during the month of October on account of a expected upswing in manufacturing as well as infrastructure construction actions.

In its monthly assessment, the Centre for Monitoring Indian Economy (CMIE) stated, “We expect steel companies to hike prices in October-November once industrial and infrastructure construction activity gathers pace.”

During the existing financial year, CMIE anticipates finished steel rates to average 7% higher than during the last fiscal.

It should be mentioned that steel rates have already mounted around 15% during the first quarter of 2011-12.

But, it has sharply reduced its growth estimation for finished steel fabrication for 2011-12 to 9.5% as against 12%.

“The downward revision is due to the lower-than-expected growth in demand for steel in the first quarter and a shortfall of iron ore likely to be faced by the steel units in Karnataka,” it said.

Previously, Tata Steel Managing Director HM Nerurkar stated that domestic steel demand was expected to nurture at around 9% in the existing financial.

The steel giant anticipates steel rates to stay stable, with rates climbing or dropping by Rs 1,000 a tonne for some time.

The majority of firms have inked coking coal agreements for the existing quarterly period at $315 per tonne, which is 40% higher than the year-ago level.

“If the ban continues for long, the plants located in Karnataka will have to cut down production,” the CMIE said.