Despite high interest rates and tax provisions, private firms in the country posted a jump of 26 per cent in their net profits in previous fiscal, primarily driven by a healthy sales growth, Reserve Bank of India (RBI) data said.
The net profits clocked by 2,359 non-government and non-financial companies in 2007-08 stood at Rs 1,34,291 crore, up by 26.2 per cent, compared with Rs 1,11,107 crore in the FY'07, RBI's September bulletin said.
Total sales, during the period, grew by 18.3 per cent in spite of a "noticeable" 14.8 per cent increase in the depreciation provisioning and a whopping 28.8 per cent jump in the interest payments, the bulletin said.
The total provisioning made by corporates in FY'08 escalated to Rs 40,664 crore, compared with Rs 37,095 crore in the previous year.
Similarly, the total interest payments escalated to Rs 25,677 crore against Rs 21,500 crore in FY'07, it said.
Companies in manufacturing and IT sectors lagged behind those in services sector, owing to their inability to pass on higher costs in raw materials, fuel and transportation, it said.
Gross profits of textile sector dipped by 6.7 per cent during the period, hit by high expenditure, mainly due to higher input prices, the bulletin said.
