The number of loss-making companies in the BSE 500 universe declined this quarter
In the three months to June 2014, the number of loss-making companies in the BSE 500 universe declined for the first time in seven quarters. It seems that after the change of leadership at the center, there are some positive vibes in the market and the companies have improved their sales turnovers.
Of a subset of 486 BSE 500 companies whose results were available, a total of 59 reported quarterly net loss in the period. This is the lowest reading since three months to June 2013. Data shows that in the last one year bigger players from the power sector saw reduction in net losses. The biggest loss-makers comprise of capital-intensive or highly leveraged companies.
Even as they have ramped up asset sales efforts in order to improve their balance sheets. Many companies sold off their assets to reduce their debt burden and lower their interest payments. Infra and construction players net losses of Lanco Infra, GMR Infra and IVRCL have widened by more than 70 % in the last one year.
The Infra and construction companies have been under a lot of pressure as the market was sluggish. The liquidity crunch and lower sales figures had increased their losses. These three companies collectively held net debt of Rs 84,300 crore as of March 2014. However it seems that the infra sector is picking up and we hope that the figures will improve in the next quarter.
Source- The Financial Express
