Today, the Reserve Bank released data on the performance of the private corporate sector during the third quarter of 2022-23 drawn from abridged quarterly financial results of 2,779 listed non-government non-financial companies. These include estimates for Q3:2021-22 and Q2:2022-23 to enable comparison (web-link https://dbie.rbi.org.in/DBIE/dbie.rbi?site=statistics#!2_42).

Highlights

Sales

• Sales growth (y-o-y) of listed private non-financial companies moderated to 12.7 per cent in Q3:2022-23 from 22.6 per cent in the previous quarter (Table 1A).

• Manufacturing companies recorded lower sales growth (y-o-y) of 10.6 per cent in Q3:2022-23 as compared with 20.9 per cent in the previous quarter; the moderation was broad-based across the industries, except for cement (Tables 2A and 5A).

• Information technology (IT) companies remained on high growth trajectory and recorded 19.4 per cent rise (y-o-y) in sales during the latest quarter (Table 2A).

• Revenue growth for non-IT services companies was supported by steady performance in trade, transport and telecommunication sectors (Tables 2A and 5A).

Expenditure

• Manufacturing companies’ expenses on raw materials moderated marginally in line with lower sales growth and tempered prices for some inputs (Table 2A).

• Staff cost rose by 8.8 per cent, 21.8 per cent and 18.2 per cent on y-o-y basis for manufacturing, IT and non-IT services companies, respectively (Tables 2A and 2B).

• The ratio of staff cost to sales stood at 5.3 per cent, 49.6 per cent and 8.1 per cent for manufacturing, IT and non-IT services companies, respectively (Table 2B).

Profit

• Operating profit of manufacturing companies contracted on an annual (y-o-y) basis for the second consecutive quarter in Q3:2022-23; it, however, expanded for both IT and non-IT services companies (Table 2A).

Interest

• Lower profits led to a decline in interest coverage ratio (ICR)¹ of manufacturing companies to 6.3 during Q3:2022-23 (8.6 a year ago) whereas the ratio stood at 48.9 for IT companies (61.3 a year ago); ICR of non-IT services companies crossed unity, led by improvement in transport and hospitality companies (Tables 2B and 5B).

Pricing power

• Operating profit margin remained steady for IT companies and inched up for manufacturing companies; non-IT services companies continued to record net losses, mainly due to the losses recorded by telecom companies (Tables 2B and 5B).

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: 2022-2023/1820

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.