Corporate sales growth hit an 18-month low in Q4 2012-13: RBI

Corporate sales growth continued to decelerate for six successive quarters of the two financial years that ended 31 March 2013, and reached the lowest since Q2 of 2009-10 in the January-March 2013 quarter, Reserve Bank of India data showed.

Net profit margin of non-financial corporates declined nominally in the fourth quarter of the financial year 2012-13 although earnings before interest, tax, depreciation and amortisation (EBITDA) as also earnings before interest and tax (EBIT) margins improved slightly,

EBITDA and net profits of corporate contracted in the last quarter of the 2012-13 financial year after observing growth in  Q2 and Q3 of 2012-13, the data revealed.

Growth in interest expenses during the fourth quarter of the 2012-13 financial year slowed down as compared with the previous quarter, according to data compiled from abridged financial results of 2,686 listed non-government non-financial (NGNF) companies, RBI said.

The slide in sales growth (Y-o-Y) was spread across manufacturing and non-IT services sectors. The IT sector witnessed some increase in sales growth in comparison to the previous quarter.

EBITDA growth improved for the IT sector and slowed down for the manufacturing sector. EBITDA contracted for non-IT services sector. Net profits contracted for all three sectors.

Large companies witnessed a slower increase in sales and expenditure with marginal rise in EBITDA and contracting net profits. Companies with sales between Rs50  lakhs and Rs1 crore performed better than the previous quarters. All other companies witnessed contraction.

RBI said the coverage of companies in different quarters varied to some extent, depending on the date of declaration of quarterly results but it was not expected to alter the aggregate position significantly.