The growth in sales of listed private non-financial companies improved to 7.2% in 2024-25 from 4.7% a year ago, according to the data released by the Reserve Bank of India on the performance of private corporate sector during 2024-25.
The report stated that despite global headwinds, the sales growth of IT companies improved to 7.1% during FY25 from 5.5% in the previous year. Non-IT services companies recorded double digit sales growth during the year, led by healthy performance of telecommunication, transport & storage services and wholesale & retail trade industries.
For manufacturing, sales rose 6% during compared to 3.5% in the previous year riding on automobiles, electrical machinery, food and beverages and pharmaceuticals industries. Petroleum and iron & steel industries, on the other hand, recorded contraction in their sales during the year.
The impact of rise in sales was visible in expenses, according to the report. The expense by manufacturing companies on raw material increased by 6.6% in the previous financial year. “Raw material to sales ratio increased to 55.7% in 2024-25 from 54.2% a year ago, pointing to input cost pressure,” the release said.
Staff costs too inched up by 10% for manufacturing, 4.4% for IT companies and 12% for non-IT services companies in the year ending March. The staff cost to sales ratio broadly remained stable for manufacturing companies while it moderated for services companies, the release stated.
Due to rise in input costs, the operating profit growth of manufacturing companies moderated to 6% during 2024-25 from 12.4% a year ago. Within the services sector, profit growth moderated to 15.9% for the non-IT services companies, while it inched up to 6.1% for IT companies.
“During 2024-25, operating profit margin moderated by 20 basis points (bps), 80 bps and 30 bps to 14.2%, 21.9% and 22.1%, respectively, for manufacturing, IT and non-IT services companies,” the report said.
The data also showed that the interest coverage ratio, which is a measure of debt servicing capacity of a company, was above 1 for the major industries. The minimum value for interest coverage ratio is 1 for a company to be viable.