Today, the Reserve Bank released data on the performance of the private corporate sector during the second quarter of 2023-24 drawn from abridged quarterly financial results of 2,835 listed non-government non-financial companies. These include data for Q2:2022-23 and Q1:2023-24 to enable comparison (web-link https://dbieold.rbi.org.in/DBIE/dbie.rbi?site=statistics#!2_42).

Highlights

Sales

• Sales growth (y-o-y) of listed private non-financial companies increased to 4.4 per cent in Q2:2023-24 from 2.1 per cent in the previous quarter (22.6 per cent a year ago). On a sequential (q-o-q) basis, sales increased by 3.7 per cent (Table 1A).

• Aggregate sales of 1,703 listed private manufacturing companies picked-up to 4.2 per cent (y-o-y) during Q2:2023-24 (0.1 per cent in Q1:2023-24), supported by higher sales growth in automobiles, cement, electrical machinery and pharmaceuticals industries (Tables 2A and 5A).

• After recording double digit growth in the previous nine consecutive quarters, sales of the information technology (IT) sector moderated to 5.9 per cent in Q2:2023-24 (Table 2A).

• Non-IT services companies also recorded lower sales growth of 1.9 per cent (y-o-y) as compared with 4.5 per cent growth during the previous quarter; lower sales of the trading companies offsetted by the higher revenue of other major non-IT services companies (Tables 2A and 5A).

Expenditure

• During Q2:2023-24, manufacturing companies’ expenses rose by 4.0 per cent on a sequential (q-o-q) basis and by 1.6 per cent on an annual (y-o-y) basis (Table 2A).

• Staff cost rose by 11.4 per cent and 15.8 per cent, on y-o-y basis, for manufacturing and non-IT services companies, respectively, while it moderated significantly to 7.7 per cent for IT companies (13.0 per cent in the previous quarter); the staff cost to sales ratio stood at 5.5 per cent, 50.1 per cent, and 10.8 per cent for manufacturing, IT and non-IT services companies, respectively, during Q2:2023-24 (Table 2B).

Pricing power

• Operating profit rose by 30.1 per cent, 5.2 per cent and 22.7 per cent (y-o-y) for manufacturing, IT and non-IT services companies, respectively, in Q2:2023-24; their operating profit margin stood at 14.5 per cent, 22.4 per cent and 21.5 per cent, respectively, (Table 2A and 2B).

Interest expenses

• Higher profits contributed to improvement in the interest coverage ratio (ICR)¹ of manufacturing companies to 7.5 during Q2:2023-24 from 6.8 in the previous quarter, despite the rise in interest outgo on sequential as well as annual basis; ICR of non-IT services companies remained above the unity for the fourth consecutive quarter, though it moderated marginally in the latest quarter (Table 2B).

List of Tables

Notes:

• The coverage of companies in different quarters varies, depending on the date of declaration of results; this is, however, not expected to significantly alter the aggregate position.

• Explanatory notes detailing the compilation methodology, and the glossary (including revised definitions and calculations that differ from previous releases) are appended.

Ajit Prasad            
Director (Communications)

Press Release: 2023-2024/1372

¹ ICR (i.e., ratio of earnings before interest and tax to interest expenses) is a measure of debt servicing capacity of a company. The minimum value for a viable ICR is 1.