NEW DELHI, Oct 25: Corporates have shown a handsome increase in earning per share (EPS), but trends point out the inability of companies to expand capital base and raise finances through equity route, an Assocham study reveals.
The EPS trends, measured by the study of about 130 companies, point out an increase of about 70 per cent earning per share for the quarter ended September 2012 as compared to the same quarter in the previous financial year.
However, the trends do not suggest towards celebrations because these also indicate towards inability of the corporates to raise capital required for their investment by expanding the equity base.
“In the middle of sluggish stock markets and risk aversion towards equity, the corporates found it unviable to issue fresh capital through equity. As a result, the capital base of a large majority of the companies remained more or less stable, which in turn resulted in the higher EPS,” Assocham president Rajkumar Dhoot said.
The companies which have shown an impressive improvement in the EPS include Indo Rama Synthetics (India), Gujarat Mineral Development Corporation, Shree Cement, Somany Ceramics, Mindtree, Mahindra Holidays and Resorts and Exide India Ltd.
However, there are some firms, including the country’s largest private sector company Reliance Industries Ltd (RIL), which have shown drop in the EPS.
The Earning per share of Reliance Industries has shown a decline from Rs 17.4 in the second quarter of FY 12 to Rs 16.60 in the comparable quarter of the current financial year.
(UNI)
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