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Sales growth of private corporate sector declined in 2013-14: RBI

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03 September 2014

Aggregate sales growth of major corporates declined in 2013-14 pulled down by declining sales in the manufacturing and service sectors (other than IT, which recovered in 2013-14 showing higher growth in sales).

Reserve Bank of India on Monday released data on the performance of private corporate business sector, which showed that the private non-financial companies posted total sales of Rs29,49,600 crore last fiscal, down from Rs29,76,000 crore in 2012-13.

While sales growth of large companies - with annualised sales of over Rs1,000 crore - moderated, sales growth of companies with annualised sales between Rs500 crore and Rs1,000 crore remained near stagnant and sales of smaller companies continued to contract.

Overall expenditure growth declined due to a fall in the growth rates of raw material expenses and staff costs. Growth in earnings before interest, tax, depreciation and amortisation (EBITDA) declined at the aggregate level.

Year-on-year growth in interest expenses dropped at the aggregate level and also across sectors. Interest coverage ratio (earnings before interest and tax/interest expenses) improved as compared with the previous year.

Pricing power as measured by EBITDA margin showed no change at the aggregate level, declined for the manufacturing sector and services (non-IT) sector and improved to some extent for the IT sector. Net profit margins remained at similar levels for aggregate level and for the manufacturing and improved for the service (IT and non-IT) sector.

RBI said the figures are based on the abridged financial results of 2,854 listed non-government non-financial (NGNF) companies.





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