Sales growth of pvt non-financial corporate business slowed down further: RBI

Data indicate that services other than IT and IT recorded lower sales growth

The sales growth of the private (non-financial) corporate business sector further moderated during 2012-13, shows Reserve Bank of India (RBI) data released on Thursday.

According to the data although Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) growth improved and net profit contraction was of lower order, margins continued to contract in 2012-13.

Data indicates that all three sectors namely manufacturing, services other than IT and IT recorded lower sales growth. EBITDA margin declined for manufacturing and services other than IT sectors. But some improvement was noticed for the IT sector.

The interest expenses as percentage of sales increased across all sectors and size classes. Data also shows that small companies (sales up to Rs 100 crore) witnessed a persistent contraction of sales since 2008-09 and rates of contraction worsened over the years. Sales of large companies also moderated sharply in 2012-13.

As per the data most of the industries followed the general trend of lower sales growth and lower profit (EBITDA) margins in 2012-13 as compared to 2011-12. Among major industries, machinery, motor vehicles and cement industries in the manufacturing sector witnessed significant decline in sales growth.

EBITDA growth improved for the iron and steel industry and declined sharply for the cement industry. Motor vehicles, construction and machinery industry witnessed contraction in EBITDA levels. EBITDA margins contracted for all these industries.

RBI said that the data compiled are based on the abridged financial results of 2,931 listed non-government non-financial companies.