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Net profits of manufacturing companies surge by 50.2% in FY22: RBI

27 Jun 2022 Evaluate

The Reserve Bank of India (RBI) has said that net profits of manufacturing companies surged by 50.2 per cent during 2021-22, the input cost pressures notwithstanding. It said net profit also increased for the information technology (IT) companies, whereas the non-IT services sector continued to record losses at the aggregate level. It noted that operating profit margins remained healthy for all the three sectors. It also stated that net profit margins remained stable for manufacturing and IT companies, whereas it remained in the negative terrain for non-IT services companies. 

The data further showed that private corporate sales and profitability recorded healthy growth in during 2021-22 as the effects of the Covid-19 pandemic subsided and economic activities recovered, especially in the second half of the year. It said sales of 1,865 listed private manufacturing companies witnessed broad based recovery and expanded 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.  IT companies also improved their performance and their sales growth accelerated to 19.8 per cent from 4.4 per cent in the previous year. Sales in non-IT services sector made a broad based recovery in 2021-22, registering 27.2 per cent annual expansion as against 14.6 per cent decline in the previous year.

On expenditure, the RBI said 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 share in their total sales increased. It added that unlike manufacturing and non-IT sector, which witnessed a turnaround during 2021-22 from the pandemic-led contraction in sales and staff cost in the previous year, the IT sector weathered the successive waves of the pandemic and logged sustained growth in both these parameters. 

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