Early bird numbers signal buoyant demand, thin profits ...i like this NEWS very very much...

Friends,

The below news says that demand has not decreased as sales has gone up..means remained bouyant....but the cost has gone up and that will come down as Commodities and crude and thereby inflation will come down.
I liked the news very very much.......because this shows that growth has not taken a back sit.......and that is where the India Growth Story lies......I liked it........
Demand remaining robust is a very good sign for economy and thereby for Stock Market.......

Rajeev

Below is the todays front page news in ET's........

Early bird numbers signal buoyant demand, thin profits

Operating Profit Growth Shows Signs Of Weakness As Raw Material, Staff Costs Soar
Ashish Agrawal ET INTELLIGENCE GROUP

THE early birds of India Inc who have come out with results for the quarter ending June 2008 appear to debunk the economic slowdown theory. An ETIG analysis of the first 120 firms whose results are available reveal that net sales of these companies have grown 26%, the highest in the last four sequential quarters. However, the bad news is that profit growth continues to be in low-single digit. Revenue as captured by net sales is directly linked to demand for products and services. So, a higher growth rate in sales indicates that demand is still buoyant. Companies are not feeling the pinch of shrinking demand just as yet. However, profits — a key parameter for investors to track earnings generated by a firm — are cutting a sorry figure. An analysis of the results of 120 companies shows that aggregate sales have grown 26%, significantly higher than the 18% clocked in Q408 and marginally higher than 25% in Q308. While operating profit growth at 16% is lower than that for Q408, it goes up to 20%, if we exclude other and extraordinary income. The growth in net profit is disappointing at 3.5%, though it was marginally higher than the 3.4% growth clocked by these firms during Q408. While the sample represents a small set of Indian companies, the initial trend does have a degree of reliability. If we compare the results of these companies with the aggregate results of India Inc for the last few quarters, we see that it matches with the overall sales performance with a small variance. But the deviation in profit growth is larger. As a result, it is reasonable to expect that the overall financials of companies, a majority of whom are yet to announce their quarter results, may show buoyant topline performance even though the verdict in case of profits is still wide open. Raw material costs hit manufacturing NON-FINANCIAL sector companies, which form the bulk of the set, have got support from reasonable growth in sales. The revenue growth has helped them partly neutralise the impact of lower other income and higher costs. Sales have grown 25%, significantly higher than 18% clocked in the previous two quarters. For the manufacturing sector, raw material cost has risen 43%, much higher than the 13% growth in the previous two quarters. Employee cost, another important item, rose 19% (10%). The impact of rising interest rates is also visible with interest cost going up by sharp 45%. Besides the rising input cost, companies have been hit by lower other income and extraordinary income, which declined almost 30% against a 40% growth in the previous two quarters.