Advance tax nos give investors cue for Q1

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With Q1 just knocking on the door, investors are apprehensive about the same. There is a fear that the upcoming earnings season will see a slowdown as the last quarter saw the government strengthening its rein on rising inflation rate and this in turn firmed interest rates. The firming of interest rates has led to a slowdown of consumer interest in sectors like auto and real estate.

But if advance tax numbers of companies is taken as one of the parameters in deciding to invest in stock markets, then there is some good news for investors.

Experts say that most investors take cue from these numbers to plan their investment strategy. Companies are required to spread their tax liability through the year. They have to pay 15% of their total tax in the first quarter, i.e. June 15, of any fiscal year. In the next quarter (September 15), 45% of the total tax needs to paid; followed by 75% by December 15; and finally by March 15, 100% of the estimated tax for the year has to be paid.

Experts compare advance tax paid by a company during the quarter with that of the corresponding year and judge the performance of that company during the year.

The few companies that came out with their advance tax numbers this quarter, have reported decent performance. Advance tax collections for the April-June period witnessed a growth of 28.8% at Rs 13,796 crore.

Companies	Rs cr
	Q1FY08	Q1FY07
SBI	503	356
Reliance Industries	295	212
ICICI Bank	250	200
IOC	239	NIL
Bajaj Auto	60	72
Century Textiles	23	24
IDBI Bank	7	NIL

The top seven advance tax payers in the first quarter are State Bank of India , Steel Authority of India , Life Insurance Corporation, Reliance Industries , ICICI , Indian Oil Corporation and TISCO.

SBI paid Rs 503 crore against Rs 356 crore paid for the corresponding period last fiscal. Reliance Industries paid Rs 295 crore against Rs 212 crore previous fiscal.

ICICI Bank paid Rs 250 crore versus Rs 200 crore last fiscal. Indian Oil Corporation paid Rs 239 crore versus nil last fiscal. Tata Steel paid Rs 220 crore verses Rs 180 crore last fiscal. 

HSBC paid Rs 160 crore against Rs 104 crore previous fiscal. Standard Chartered paid Rs 150 crore against Rs 100 crore previous fiscal. Citibank paid Rs 140 crore against Rs 95 crore previous fiscal.

Bajaj Auto paid Rs 60 crore versus Rs 72 crore (YoY). Videocon is Rs 5 crore, staying unchanged over last year. Century Textiles is Rs 23 crore vs Rs 24 Cr. While, IDBI Bank is Rs 7 crore versus Nil.

BSNL which was among the top advance taxpayers last fiscal witnessed a decline of 65.7% to Rs 120 crore. Similarly, NTPC 's advance tax payment in the first quarter of the current fiscal saw a negative growth of Rs 15.8% to Rs 202 crore.

This indicates that these companies are well on the track of growth and will continue to be the same here on and also that one can expect a good Q1FY08.

By-Piyu Sen