Braving slowdown, Gujarat-based small and medium enterprises (SMEs) have performed far better financially when compared to the national average, data complied by Crisil shows.
Not only sales are growing, operating and net profit margins have also increased, an indication of better utilisation of resources, productivity and efficiency at the state level.
Sales of state-based SMEs have grown by 31% compared to country’s average of 26%. Profit after tax (PAT) margin in Gujarat is 6.66% compared to just 3.75% at the national level, reveals the data.
Experts believe that entrepreneurial skills, adoption of best business practices and support of the state has taken state-based SMEs into a new league.
CRISIL, a research and ratings agency, has released a study on the financial performance of SMEs in 2010-11 compared to 2009-10. “Availability of bank finance deteriorated in 2010-11 due to RBI’s monetary policy and tight liquidity conditions in the banking sector. This compelled SMEs to use their own funds. At national level, capital infusion by promoters increased by 45%, however in case of Gujarat it is just 16%,” senior director of SME ratings at CRISIL, Sachin Nigam says.
