The net profit of non-government non-financial (NGNF) companies continued to contract at 0.7% in 2014-15 but at a lower rate as against -5.1% in 2013-14 due to massive improvement in services (non-IT) sector, as per data compiled by RBI on performance of private corporate business sector during 2014-15. The data is based on abridged financial results of 2,925 listed non-government non-financial (NGNF) companies.
The report further highlighted that sales performance of services (non-IT) improved in 2014-15 by 5.9% compared to 4.8% for previous year. Similarly, mining and quarrying industry group also recovered. However, decline in sales performance of the manufacturing at 0.4% and IT sector at 8.9% pulled down aggregate sales growth of non-government non-financial companies in 2014-15. In particular, petroleum products industry group recorded a sharp contraction in sales growth.
On expenditure, reduction in the growth rates of raw material expenses at -3.4% compared to 2.0% for previous year and staff cost at 10.5% against 11.8% last fiscal caused a decrease in aggregate expenditure growth in 2014-15.
Further, EBITDA (Earnings before Interest Tax, Depreciation and Amortization) increased at the aggregate level due to improved performance of services (non-IT) sector at 32.4% against -3.7% previous year. Besides, Year-on-Year growth in interest expenses dropped at the aggregate level and also across sectors (non IT, manufacturing and IT). Pricing power, as measured by EBITDA margin remained range-bound. Net profit margins remained at similar levels at the aggregate level and improved for services (non-IT) sector.