Performance of Private Corporates in Q4 2015-16 a mixed picture: RBI Data Release

Private corporate sector signaled a turnaround and recorded positive sales growth at the aggregate level in Q4:2015-16 after successive contraction for four quarters. Operating profit growth continued to improve at the aggregate level and across all sectors, mainly on account of improved sales growth and continued contraction in raw material expenses. Services (other than IT) sector primarily contributed in the rise of Y-o-Y interest expenditure at the aggregate level and this sector witnessed contraction in net profits. These findings were revealed by the data on the performance of non-financial private corporate business sector during the fourth quarter of 2015-16 (January– March 2016), released today by the Reserve Bank of India on its website.

Highlights

Sales

  • Aggregate sales grew by 2.3 per cent after contraction for four successive quarters. Sales growth also improved for manufacturing sector and IT sector while it moderated for services (other than IT) sector (Table 1A, 2A).

Expenditure

  • At the aggregate level and in manufacturing and services (other than IT) sectors, expenses on raw material contracted at a slower pace than previous quarter (Table 1A, 2A). Y-o-Y growth rate of staff cost moderated across sectors (Table 2A).
  • Cost of raw materials to sales ratio declined at the aggregate level and in the manufacturing sector (Table 1B, 2B).

Operating Profit

  • At the aggregate level, operating profit grew by 16.8 per cent in Q4:2015-16 (Table 1A).
  • Operating profit growth stood at 11.8 per cent for the manufacturing sector. It improved for both services (other than IT) sector and the IT sector (Table 2A).

Interest

  • Y-o-Y interest expenses increased at the aggregate level primarily due to an increase in services (other than IT) sector (Table 1A, 2A). Within the services (other than IT) sector, the ‘Telecommunications’ industry showed a significant increase in interest expenses (Table 5A).

Net Profit

  • Net profit grew by 16.4 per cent in Q4:2015-16 against 15.9 per cent in the previous quarter (Table 1A).
  • Among the sectors, net profit showed a sharp deceleration for the manufacturing sector and contraction for services (other than IT) sector but improved significantly for IT sector (Table 2A).

Pricing power

  • Pricing power measured by operating profit margin remained at similar levels in Q4:2015-16 as in the previous quarter at the aggregate level as also for the manufacturing sector. It improved for services (other than IT) sector and declined marginally for the IT sector (Table 1B, 2B).

The Reserve Bank compiles and releases every quarter, the data based on the abridged financial results of listed non-government non-financial companies. The data released today is based on the abridged financial results of 2,710 such companies. Data pertaining to Q4:2014-15 and Q3:2015-16 are also presented to enable comparison. It may be noted that coverage of companies in different quarters varies to some extent, depending on the date of declaration of quarterly results. This, however, is not expected to significantly alter the aggregate position. ‘Explanatory Notes’ containing the brief methodology followed for compilation of data and the glossary of terms (including revised definitions and calculations that differ from previous releases) are given at the end. The list of tables is given below:

List of Tables
Table No. Title
1 A Performance of Non – Government Non-Financial Companies Growth Rates
B Select Ratios
2 A Performance of Non-Government Non-Financial Companies – Sector – wise Growth Rates
B Select Ratios
3 A Performance of Non-Government Non-Financial Companies according to Size of Paid-up-Capital Growth Rates
B Select Ratios
4 A Performance of Non-Government Non-Financial Companies according to Size of Sales Growth Rates
B Select Ratios
5 A Performance of Non-Government Non-Financial Companies according to Industry Growth Rates
B Select Ratios
Explanatory Notes
Glossary

Alpana Killawala
Principal Adviser

Press Release : 2016-2017/10