The Reserve Bank of India on February 28th 2022 released data on the performance of corporate business sector during the third quarter of 2021-22 taken from the edited quarterly financial results of 2,744 listed non-government non-financial (NGNF) companies. The data has been compiled based on the date of declaration of results during different quarters; however, the same will not alter the aggregate position significantly. Please find below key takeaways from the data:
Performance of Corporate Business Sector
Sales of listed private non-financial companies improved by 25.3 per cent in the Q3:2021-22 as compared with 31.8 per cent during the previous quarter and 4.0 per cent in the corresponding quarter a year ago.
- Total sales of 1,701 listed manufacturing companies registered sound growth of 27.3 per cent, supported by high sales growth in petroleum, non-ferrous metals, iron and steel, chemicals and textiles industries.
- Maintaining their growing trend, the information technology (IT) companies registered a 20.7 per cent increase (y-o-y) growth in sales during the Q3:2021-22.
- Sales of non-IT services companies increased by 22.0 per cent in Q3:2021-22; telecommunication companies, which account for nearly a fourth of this broad category, witnessed a significant decline in sales but non-telecom companies registered good growth.
- In corresponding with an increase in sales, manufacturing companies' expenditure on raw material increased by 37.1 per cent; expenses on raw material contributed to 63.3 per cent of their total expenses.
- Manufacturing, IT and non-IT services sector companies registered 7.6 per cent, 21.0 per cent and 15.8 per cent increase (y-o-y) in staff cost, respectively, during Q3:2021-22; staff cost had 6.2 per cent, 64.7 per cent and 10.6 per cent shares, respectively, in total expenditure of these three sectors.
- With an increase in expenditures, the operating profit growth decelerated across sectors in Q3:2021-22.
- The interest coverage ratio (ICR)1 of manufacturing companies remained firm at 8.6 in Q3:2021-22 (8.7 in the previous quarter); the ICR of non-IT services companies remained below unity.
- Pricing power in terms of operating profit and net profit margins remained steady for manufacturing and IT companies.