Hindustan Unilever Ltd. (HUVR), the Indian unit of the world’s second-largest consumer goods company, and ICICI Bank (ICICIBC) Ltd. paid more advance tax for the three months to June 30, indicating rising profits.
Hindustan Unilever paid 45 percent more, or 1.4 billion rupees ($25 million), for the quarter, according to a deputy commissioner in Mumbai’s tax office. ICICI Bank, the nation’s second-largest lender, increased payment 25 percent, according to the official who declined to be identified citing rules.
Companies pay tax in advance based on their estimated income for the year, a measure monitored by investors as an indicator of profitability. The benchmark BSE India Sensitive Index (SENSEX) gained 1.5 percent to its highest in more than a month.
“The increase shows there is no serious deterioration in corporate earnings,” said Gajendra Nagpal, chief executive officer with New Delhi-based Unicon Financial Intermediaries. “Most people expected the numbers to be less than last year.”
State Bank of India paid 11.7 billion rupees, compared with 11 billion rupees a year earlier. Tata Steel Ltd. (TATA) paid 4 percent more, while Housing Development Finance Corp. (HDFC) raised tax payments 18 percent to 3 billion rupees, the official said.
Indian companies pay 30 percent of their income as tax.
India’s economy expanded 5.3 percent in the three months through March. It may grow 6.5 percent to 7 percent this year, Montek Singh Ahluwalia, the deputy chairman of the nation’s planning commission, said June 8, short of Prime Minister Manmohan Singh’s goal of 9 percent growth.
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