Telecom, aviation and auto sectors have emerged as the industries with the highest losses in the second quarter of the current fiscal. While the telecom sector reported losses of Rs 79,759 crore, aviation companies were a distant second with losses of Rs 1,532 crore.

Analysis done by Care Ratings show that shipping and public sector banks were also in the list of poor performers in the second quarter. On the other hand, refineries, pharmaceutical and drugs, power generation and distribution, oil exploration and housing finance companies report highest profits during the second quarter.

“The number of industries which recorded positive growth in net sales during Q2-FY20 has almost halved vis-à-vis the number of industries which had recorded positive growth in net sales during Q2-FY19,”Care Ratings said.

Automobile records dip in sales

Automobile industry has recorded significant contraction in net sales with net profits of passenger vehicles and auto ancillary also registering negative growth. However, the profits of 2-3 wheeler segment and tractors have recorded profits (0-10%) owing to lower input costs. - Industries dependent on power & fuel as inputs like metals (non-ferrous), steel & iron, cement and construction materials have recorded negative growth in sales while significant profits in Q2 owing to lower power cost and raw material cost.

Textiles sales witnessed a decline of about (-) 3.2% in Q2 FY20 vis-a vis double digit growth of about 14% during corresponding period previous year on the back of weak sentiments and overall weakness in the economy. Despite various offers, deals and discounts, textile sales failed to pick up to the previous year levels for most of the players in the set considered.

The telecom industry recorded significant losses in Q2-FY20 as against limited profit in Q2-FY19. The loss can be attributed to Supreme Court judgement on Adjusted Gross Revenue (AGR) which led to accounting of charges (including principal, interest, penalty and interest on penalty) as exceptional items in the statements.

Airline industry posts losses in Q2

The net sales of the airline industry rose significantly by 34.7 per cent in Q2-FY20, higher than 13 per cent growth recorded in Q2- FY19. However, the net losses of the airline industry have widened further in Q2-FY20 from a year ago.

At the same time, losses have widened as a result of narrowing passenger yields. The industry continues to face intense competition amidst lower-growth in passenger numbers.

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