Private non-financial firms’ sales contracted in 2013-14: RBI

Chennai, Sep 2 :

The total sales of non-financial private corporate sector in 2013-14 declined due to lower sales growth in the manufacturing sector while the services sector logged sales growth, according to a study by the Reserve Bank of India (RBI).

Releasing the data on the performance of the private corporate sector (non-financial), the RBI Tuesday said the information technology (IT) sector recovered in 2013-14 showing higher sales growth.

Reserve Bank of India
Reserve Bank of India

According to the RBI, the data is compiled on the basis of abridged financial results of 2,854 listed non-government, non-financial companies.

As per the study, the private non-financial companies posted a total sales of Rs.29,496 billion last fiscal down from Rs.29,760 billion posted in 2012-13.

The RBI said while the sales growth of large companies (annualised sales more than Rs. 10 billion) moderated, sales growth of companies with annualised sales between Rs.5-10 billion remained near stagnant and sales of smaller companies continued to contract.

According to the RBI, the expenditure growth last fiscal declined due to a fall in the growth rates of raw material expenses and staff costs.

Earnings before Interest Tax Depreciation and Amortisation (EBITDA) growth declined at the aggregate level.

Similarly the 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.

The 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 services (IT and non-IT) sectors.


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