Net profit of listed private sector companies recorded a robust growth of 16 per cent in the second quarter (July-September) of the current fiscal compared with 11.2 per cent in the previous quarter, the Reserve Bank data showed.
This reflected a significant improvement in the pricing power of manufacturing corporate, RBI pointed out.
The growth in profitability was led by manufacturing sector, which continued to record the highest growth rate, whereas services (Non-IT) sector continued to witness contraction in net profits, although at a much lower rate.
"Aggregate sales growth (Y-o-Y) of the listed non- government non-financial (NGNF) companies grew by 1.9 per cent in Q2 2016-17, after near stagnation in Q1 2016-17," the RBI said.
However, raw material expenses increased in the quarter in line with the general pause in falling global commodity prices.
"This resulted in a deceleration of operating profit growth at the aggregate level," it said. The data is based on abridged financial results of 2,702 listed non-government non-financial companies for second quarter of 2016-17.
Interest expenses of private corporate remained unchanged in the second quarter which helped in a robust growth of 16 per cent in net profit at the aggregate level.
Sales growth improved significantly (3.7 per cent) for the manufacturing sector after contraction in the previous quarter. However, sales of the services (Non-IT) sector continued to contract and IT sector witnessed deceleration in sales growth.
At the aggregate level and in the manufacturing sector, raw material expenses increased after contraction in the previous seven quarters. Staff cost increased in the manufacturing and services (Non-IT) sector and slightly moderated for the IT sector.
Operating profit decelerated to 5.5 per cent in Q2 from 9.6 per cent in the previous quarter. Growth in operating profits in July-September quarter moderated across all sectors with significant deceleration for the IT sector, RBI said.