The Reserve Bank released data on the performance of the private corporate sector during the fourth quarter of 2019-20 drawn from abridged quarterly financial results of 2,6201 listed non-government non-financial (NGNF) companies.
Sales of manufacturing sector companies declined by 15.6 per cent (Y-o-Y) in Q4:2019-20 as compared with 5.9 per cent growth in Q4:2018-19; this contraction was broad based across industries.
Services sector companies recorded deceleration in activities; sales growth (Y-o-Y) for information technology (IT) and non-IT services sector companies increased by 8.0 per cent and 0.8 per cent, respectively, in Q4:2019-20.
Subdued production related activities resulted in lower expenditure on raw materials for the manufacturing sector in Q4:2019-20.
Staff cost growth (Y-o-Y) moderated for the manufacturing and IT services sectors and declined for the non-IT services sector in Q4:2019-20.
Lower sales led to decline in operating profits of manufacturing companies in Q4:2019-20; operating profits of services companies (IT and non-IT) also decelerated due to moderation in sales growth.
Interest expenses of services sector companies (IT and non-IT) have surged, as the new accounting norms prescribed inclusion of lease payment obligations under this head.
Interest coverage ratio (ICR) of the manufacturing companies moderated to 3.5 in Q4:2019-20 from 4.3 in the previous quarter because of lower earnings; the ICR of non-IT services companies remained below one.
Profit margins dipped for manufacturing companies, though they remained steady for IT companies; Non-IT services companies recorded negative net profit margins driven down by heavy losses.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
