Corporate sales across three major sectors, viz, manufacturing, services (including IT), in the private corporate sector recorded marginal improvement in the fourth quarter of the 2013-14 financial year compared to that of the previous quarter, data released by the Reserve Bank of India showed.
While sales of large companies (with annualised sales more than Rs1,000 crore) improved to some extent, the total sales of companies with annualised sales between Rs500 and Rs1,000 crore remained near stagnant while sales of smaller companies continued to contract, RBI said.
Corporates reported an overall increase in expenditure due to increase in raw material expenses although growth in staff costs declined.
Earnings before interest, tax, depreciation and amortisation (EBITDA) registered a decline in growth at the aggregate level.
Growth in interest expenses dropped year-on-year at the aggregate level and increased for the manufacturing sector. However, interest expenses contracted for the non-IT services sector. Interest coverage ratio (earnings before interest and tax/interest expenses) improved as compared with the previous quarter. However, the ratio remained similar to that in Q4 of the previous year, at the aggregate level as well as for the sectors.
Pricing power as measured by EBITDA margin showed no change at the aggregate level, with some improvement for the manufacturing sector and decline for the IT and non-IT services sectors. Net profit margins improved at the aggregate level and for the manufacturing and non-IT services sectors.
RBI said the data compiled are based on the abridged financial results of 2,719 listed non-government non-financial companies.