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Performance Of Private Ccorporate Business Sector During 4th Quarter Of 2016-17

The Reserve Bank compiles and releases data based on abridged financial results of listed non-government non-financial (NGNF) companies. This release (press release # 2016-2017/3538 dt. Jun 30, 2017) relates to abridged financial results of 2,726 listed NGNF companies for Q4:2016-17.

Data pertaining to Q4:2015-16 and Q3:2016-17 are also presented in the tables to enable comparison. The data can be accessed at https://dbie.rbi.org.in/DBIE/dbie.rbi?site=statistics#!2_42.

Highlights

Sales

  • Aggregate sales growth (Y-o-Y) improved in Q4:2016-17, primarily for the manufacturing sector, led by industries like iron and steel and petroleum products as well as for mining and quarrying, while the information technology (IT) sector witnessed decline in sales growth.
  • Sales of services sector companies (other than IT), however, continued to contract for four successive quarters.

Expenditure

  • At the aggregate level and for the manufacturing sector, raw material expenses growth increased sharply from the previous quarter, while staff costs increased at a higher rate for the services (other than IT) sector.
  • The cost of raw materials to sales ratio increased slightly for the manufacturing sector, while the staff cost to sales ratio rose for the services (other than IT) and the IT sectors.

Operating profit

  • Despite improvement in sales growth, operating profit growth decelerated significantly at the aggregate level and for the manufacturing sector, due to increased expenditure on raw materials.
  • The services (other than IT) sector recorded contraction in operating profits due to shrinking sales and large increase in expenditure.

Interest

  • Interest expenses declined in Q4:2016-17 from a year ago at the aggregate level and for the manufacturing sector.
  • Within the manufacturing sector, motor vehicles and iron and steel industries experienced lower growth of interest expenses than in the previous quarter.
  • Services (other than IT) witnessed further decline in the Interest coverage ratio.
  • The interest coverage ratio for the telecommunication industry remained below one in Q4:2016-17.

Net profit

  • Contraction was observed in net profits at the aggregate level due to heavy losses incurred by the telecommunication industry and lack of support from other/non-operating income.

Pricing power

  • The operating profit margin declined across all sectors.
  • The net profit margin turned negative for the services (other than IT) sector mainly due to the telecommunication industry; excluding the telecommunication companies, the net profit margin of the services (other than IT) companies stood at 5.4 per cent.

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performance of private corporate business sector 4th quarter 2016-17


Note:

  • Coverage of companies in different quarters varies, depending on the date of declaration of results; however, this is not expected to significantly alter the aggregate position.
  • Listed companies having net worth more than Rs. 500 crores and their associated companies (subsidiaries, joint ventures etc.), have moved into the Indian Accounting Standards from Indian GAAP, as mandated by the Ministry of Corporate Affairs (MCA), since Q1:2016-17. The impact of transition, appears muted at the aggregate level in terms of the growth rates, although the same may not hold for the ratios.
  • ‘Explanatory Notes’ containing the brief methodology followed for compilation of data and the glossary (including revised definitions and calculations that differ from previous releases) are given at the end.

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