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The Reserve Bank of India’s latest report on the performance of listed private non-financial companies for Q1 FY2024-25 reveals steady sales growth across key sectors, with aggregate sales rising by 6.9% year-on-year (y-o-y).
The report highlights the financial health of these companies, noting higher operating and net profits, as well as trends in expenditure and pricing power. While manufacturing, IT, and non-IT services showed positive growth, certain sub-sectors like cement and steel faced challenges, impacting their overall performance. Aggregate sales growth of listed private non-financial companies at 6.9 per cent (y-o-y) during Q1:2024-25 remained close to that in the previous quarter but higher than 2.1 per cent growth a year ago.
All major sectors, viz., manufacturing (67.5 per cent share in total sales), information technology (IT) (10.1 per cent), non-IT services (12.8 per cent), construction (5.3 per cent) electricity (2.9 per cent) and mining (1.1 per cent) recorded higher sales when compared to the corresponding quarter last year; within manufacturing sector, however, sales of cement, iron and steel, fertilisers, paper products and glass products declined.
Expenditure
Manufacturing companies’ expenses on raw material rose by 6.4 per cent (y-o-y) in consonance with their sales growth, whereas their staff cost recorded higher increase of 10.7 per cent during Q1:2024-25; staff cost of IT and non-IT services companies increased by 2.4 per cent and 12.8 per cent, respectively.
Staff cost to sales ratio for manufacturing, IT and non-IT services companies stood at 5.8 per cent, 49.1 per cent, and 11.0 per cent, respectively, during Q1:2024-25.
Pricing power
At aggregate level, operating profit and net profit rose by 9.6 per cent and 14.2 per cent (y-o-y), respectively, during Q1:2024-25 (Table 1A and 1B).
Operating profits of manufacturing, IT and non-IT services companies rose by 9.3 per cent, 5.1 per cent and 6.0 per cent, respectively, during Q1:2024-25 and their operating profit margin stood at 14.6 per cent, 22.5 per cent and 21.4 per cent, respectively; operating profits of listed companies in electricity and gas supply sectors, and construction sectors, however, recorded much higher growth of 28.6 per cent and 28.4 per cent, respectively,
Interest expenses
Interest coverage ratio (ICR)1 of manufacturing and non-IT companies improved marginally to 7.9 and 1.8 per cent, respectively, during the latest quarter; ICR for IT companies remain elevated at 42.9 per cent.
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