Beware of these companies – MTM can take away the earnings

In the analysis for the period ended March 31 2009, Punj Lloyd, Bharat Forge and JSW Steel are among the five major companies estimated to have been hit hardest by the MTM losses during the just-ended fiscal.

"Five prominent companies with the highest MTM risk are Reliance Communications (114 per cent of adjusted FY09 profit after tax), Punj Lloyd (92 per cent), Bharat Forge (84 per cent), JSW Steel (78 per cent) and Tata Motors (75 per cent of standalone PAT ),'' the report said.
Reliance Communications is expected to face MTM losses Rs 1,264.9 crore in the fourth quarter of FY09, taking the total MTM for the full fiscal to Rs 5,981.5 crore. This could represent 114 per cent of its adjusted full year profit after tax, the analysis revealed. The report estimated the fourth-quarter MTM booking for Tata Motors at Rs 165.1 crore, taking the full-year total to Rs 797.7 crore.

The report also revealed considerable MTM risks for companies like MindTree, HCC, Tulip Telecom, Jain Irrigation, M&M, HCL Tech, Tata Steel, Bharti Airtel, India Cement, PFC, Patni Computer, TCS and Wipro with MTM losses ranging 12-73 per cent of full-year profits. Besides, it said that the losses would be below 10 per cent for companies like Infosys, Idea Cellular, Tech Mahindra, Ashok Leyland and Maruti.