Today, the Reserve Bank released data on the performance of the private corporate sector during the third quarter of 2020-21 drawn from abridged quarterly financial results of 2,692 listed non-government non-financial (NGNF) companies. Data pertaining to Q3:2019-20 and Q2:2020-21 are also presented in the tables to enable comparison. The data can be accessed at the web-link https://dbie.rbi.org.in/DBIE/dbie.rbi?site=statistics#!2_42.

Highlights:

Nominal Sales

• With gradual easing of restrictions related to the Covid-19 pandemic and rebound in demand conditions, sales of 1,685 manufacturing companies expanded by 7.4 per cent (Y-o-Y) in Q3:2020-21 after recording contraction during the preceding six quarters; the recovery was led by iron and steel, automobiles, cement, chemicals and pharmaceuticals companies (Table 2A and Table 5A).

• Information technology (IT) sector remained in positive terrain throughout the Covid-19 pandemic period and their sales increased by 5.2 per cent (Y-o-Y) in Q3:2020-21 (Table 2A).

• Non-IT services sector recorded lower contraction (Y-o-Y) in sales [(-)5.7 per cent in Q3:2020-21 vis-à-vis (-)14.5 per cent in the previous quarter], which was supported by better performance of telecommunication, real estate and trade sector companies (Table 2A and Table 5A).

Expenditure

• Manufacturing companies increased their expenditure on raw materials during Q3:2020-21 in tune with rise in sales (Table 2A).

• Staff cost growth (Y-o-Y) increased for manufacturing and IT companies in Q3:2020-21, whereas it remained in contraction zone for non-IT services sectors (Table 2A).

• Operating profits for all group of companies improved in Q3:2020-21 (Table 2A).

Interest

• With rise in profits, interest coverage ratio (ICR)¹ of manufacturing companies improved noticeably to 6.6 in Q3:2020-21 (4.6 in the previous quarter); ICR of non-IT services companies remained below one (Table 2B).

Pricing power

• Profit margins improved further for manufacturing and IT companies in this quarter (Table 2B).

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.

(Yogesh Dayal)     
Chief General Manager

Press Release: 2020-2021/1206

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.