Listed Non-Financial Companies Improved Sales Performance To 7.2% In FY25: RBI

New Delhi, Jun 27 (KNN) Listed private non-financial companies in India demonstrated resilience in fiscal year 2024-25, with sales growth accelerating to 7.2 per cent compared to 4.7 per cent in the previous year, according to data released by the Reserve Bank of India on corporate sector performance.

The manufacturing sector contributed significantly to this improvement, recording sales growth of 6.0 per cent in FY25, up from 3.5 per cent in the preceding year.

The automobile, electrical machinery, food and beverages, and pharmaceutical industries emerged as key drivers of this growth momentum.

However, the sector faced challenges as petroleum and iron & steel industries experienced contractions in sales during the same period.

The information technology sector maintained steady progress despite global economic uncertainties, with sales growth rising to 7.1 per cent in FY25 from 5.5 per cent in the previous year.

Non-IT services companies outperformed expectations with double-digit sales growth, supported by robust performance in telecommunications, transport and storage services, and wholesale and retail trade sectors.

Manufacturing companies encountered significant input cost pressures during FY25, with raw material expenses increasing by 6.6 per cent.

The raw material-to-sales ratio climbed to 55.7 per cent from 54.2 per cent in the previous year, indicating heightened cost challenges for manufacturers.

Staff costs across sectors showed varied trends, rising by 10.0 per cent for manufacturing companies, 4.4 per cent for IT firms, and 12.0 per cent for non-IT services companies.

The impact of rising input costs became evident in operating profit performance across sectors. Manufacturing companies saw their operating profit growth moderate to 6.0 per cent in FY25 from 12.4 per cent in the previous year.

Within the services sector, non-IT companies experienced a deceleration in profit growth to 15.9 per cent, while IT companies recorded a marginal improvement to 6.1 per cent.

Operating profit margins contracted across all major sectors during FY25. Manufacturing companies witnessed a 20 basis points decline to 14.2 per cent, IT companies saw an 80 basis points reduction to 21.9 per cent, and non-IT services companies experienced a 30 basis points decrease to 22.1 per cent.

Despite these margin pressures, the financial health of companies showed improvement in terms of debt servicing capacity.

The interest coverage ratio, which measures a company's ability to service its debt obligations, improved across major sectors during FY25 compared to the previous year.

All major industries maintained interest coverage ratios above unity, indicating adequate earnings to meet interest payment obligations.

(KNN Bureau)