Data On Performance Of Private Corporate Business Sector During 2021-22

Reserve Bank of India released the data on the performance of the private corporate sector during 2021-22 drawn from abridged financial results of 3,166 listed non-government non-financial (NGNF) companies. Below are the highlights of the report:

Sales

• Private corporate sales and profitability registered good growth during 2021-22 as the effects of the COVID-19 pandemic lessened and economic activities recovered, especially in the second half of the year
• Sales of 1,865 listed private manufacturing companies witnessed broad-based recovery and expansion by 36.7 per cent during 2021-22 as compared with a contraction of 2.8 per cent in the preceding year; both volume and price components contributed to the higher growth, and it was also aided by favourable base effects 
• Information technology (IT) companies also enhanced their performance and their sales growth accelerated from 4.4 per cent to 19.8 per cent compared to the previous year

Expenditure

• Consistent with the rise in production and sales, manufacturing companies' expenditure on raw materials increased by 48.6 per cent during the year and its contribution to their total sales increased.
• Unlike the manufacturing and non-IT sector, which witnessed a turnaround during 2021-22 from the pandemic-led shrinkage in sales and staff cost in the previous year, the IT sector weathered the consecutive waves of the pandemic and recorded constant growth in both these parameters

Interest

Interest cost moderated for manufacturing and IT companies during the year and the interest coverage ratio (ICR)¹ of manufacturing companies improved from 5.0 to 8.4 in 2021-22 in the previous year due to lesser interest expenditures and increase in profits; ICR continued to persist below the unity for non-IT services companies

Profit

• Notwithstanding the input cost pressures, net profits of manufacturing companies surged by 50.2 per cent during 2021-22 and it also improved for the IT companies, whereas the non-IT services sector continued to register losses at the combined level
• Operating profit margins continued healthy for all the three sectors
• Net profit margins remained steady for manufacturing and IT companies, whereas it remained in the negative terrain for non-IT services companies