India Inc's sales growth slips, other income grows: RBI report
Indian companies recorded a decelerating sales growth rate in the first half of current fiscal, while it was 'other income' helping them post a decent growth in net profits, an analysis of Reserve Bank says.
According to the analysis, published in latest monthly bulletin of RBI, the sales of non-financial private sector companies grew by 12.3 per cent in the first half of 2012-13, down from 17.3 per cent in the preceding six-month period.
Besides, the companies' operating growth posted only a modest growth, but their 'other income' helped them register a significant growth in net profits.
"While there was a modest growth in operating profits, more significantly net profits went up partly contributed by 'other income', reversing the declining trend observed in the previous two half years," a report in RBI's January 2013 monthly bulletin said.
The report, which is part of a series of articles putting forth views of RBI's research staff on varied issues, analysed the performance of private corporate business sector during the first half of 2012-13 based on financial results of 2,832 listed non-government and non-financial companies.
The deceleration in sales growth was broad-based across manufacturing, IT and non-IT services sectors.
"Sales growth (Y-o-Y) of the corporate sector decelerated further to 12.3 per cent during H1, 2012-13 (April-September) from 17.2 per cent in H2, 2011-12 (October-March)," it said.
In line with the sales, the expenditure on major heads such as consumption of raw materials (CRM) also grew at slower rates, resulting in a modest growth in operating profits during the April-September period
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