Reserve Bank of India has released data on the performance of the private corporate sector during the third quarter of 2020-21 drawn from abridged quarterly financial results of 2,692 listed non-government non-financial (NGNF) companies. With gradual easing of restrictions related to the Covid-19 pandemic and rebound in demand conditions, sales of 1,685 manufacturing companies expanded by 7.4 per cent (Y-o-Y) in Q3:2020-21 after recording contraction during the preceding six quarters; the recovery was led by iron and steel, automobiles, cement, chemicals and pharmaceuticals companies.
Information technology (IT) sector remained in positive terrain throughout the Covid-19 pandemic period and their sales increased by 5.2 per cent (Y-o-Y) in Q3:2020-21.
Non-IT services sector recorded lower contraction (Y-o-Y) in sales [(-)5.7 per cent in Q3:2020-21 vis-vis (-)14.5 per cent in the previous quarter], which was supported by better performance of telecommunication, real estate and trade sector companies.
Manufacturing companies increased their expenditure on raw materials during Q3:2020-21 in tune with rise in sales. Staff cost growth (Y-o-Y) increased for manufacturing and IT companies in Q3:2020-21, whereas it remained in contraction zone for non-IT services sectors. Operating profits for all group of companies improved in Q3:2020-21.
With rise in profits, interest coverage ratio (ICR) of manufacturing companies improved noticeably to 6.6 in Q3:2020-21 (4.6 in the previous quarter); ICR of non-IT services companies remained below one.
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