Q3 advance tax collection update - payments rise to 5.2% YoY

On Dec 16, 2011, we had published the initial Q3 advance tax numbers announced by corporate India. As per the initial numbers, the advance tax collection for the 3rd quarter from India Inc. was more or less flat, suggesting that the slowdown is impacting the companies' bottomlines.

Today, after compiling a list of 60 companies which have declared their Q3 FY12 advance tax numbers, we reiterate our previous verdict. The latest list suggests that the advance tax payment for these companies has marginally risen by 5.2% on a YoY basis. However, as we said earlier, the targeted tax collection set by the government for Mar 31, 2012 still looks difficult.

ONGC continues to top the list of 60 companies, paying the highest advance tax for Q3 at Rs 2924 cr. However, it was FMCG major GCPL that saw the maximum hike in its advance tax payout for Dec 2011, as it doled out Rs 40 cr against Rs 15 cr in the previous year same quarter, a jump of 167%.

The usually-defensive FMCG sector seems to have outplayed all major sectors this quarter, on the back of consumption-led growth. On another note, the cement sector seems to have benefited from the low base effect seen in the previous year.

The pharma companies have painted a mixed picture once all the results were out. Cipla, Pfizer and Novartis seems to have done well, but other majors like Lupin and GSK Pharma have disappointed.

In the auto sector, barring the dismal outgo by Tata Motors, all other Tata Group companies have fared well in their respective advance tax numbers for Q3.

In the capital goods sector, L&T solely saw a jump in its advance tax outgo, whereas Crompton Greaves and Siemens saw a sharp decline in their respective outflows. Among the IT pack, TCS saw a whopping 150% jump in its advance tax payment on a YoY basis, indicating some good times ahead.

Among oil & gas, upstream majors like ONGC, Oil India and GAIL have posted decent advance tax outgo respectively, suggesting a good run ahead. RIL has been a laggard in this quarter after being the highest advance tax payer in Q2 FY12.

Going forward, with the issue of the subsidy burden looming at large over the govt., we expect the profits of the upstream companies to be eaten up substantially in the cause of footing a part of the subsidy bill.