The Reserve Bank of India (RBI) in its latest report based on abridged financial results of listed non-government non-financial companies, stated that aggregate sales growth of the listed private companies slowed down to 0.1 percent in the first quarter of 2016-17 year-on-year bases, due to contraction in sales of manufacturing and services (other than IT) sector. RBI said that this resulted in a slowdown in operating profit at the aggregate level.
The data which is based on abridged financial results for Q1 FY17 of 2,775 listed non-government non-financial companies, stated that Net profit growth at the aggregate level declined to 11.2 percent in Q1 FY17 from 16.4 percent in Q4 FY16. Sector wise net profit decelerated significantly for the IT sector companies and contracted substantially for the services (other than IT) sector, while improved for the manufacturing sector. At the aggregate level, operating profit decelerated to 9.6 percent in Q1 FY17 from 16.8 percent in Q4 FY16. For the manufacturing sector, growth in operating profit in Q1 FY17 was almost similar to that of the previous quarter. However, it recorded a sharp deceleration for both services sector (other than IT) and the IT sector.
Further, at the aggregate level and in the manufacturing sector, contraction in raw material expenses slowed down, while the services (other than IT) sector recorded a steeper contraction. Year-on-Year growth in interest expenses moderated at the aggregate level. Within the services (other than IT) sector, the ‘Telecommunications’ industry continued to record high growth in interest expenses. Pricing power measured by operating profit margin increased in Q1 FY17 as compared with the previous quarter at the aggregate level and the manufacturing sector. However, it declined for the services sector (other than IT) and remained at similar levels for the IT sector.