Operating profit growth of listed firms decelerated in Q4 of FY22: RBI data
In the January-March quarter of 2021-22, the growth of operating profits for listed private companies showed a notable slowdown across various sectors due to increased expenditures, as per data from the Reserve Bank of India (RBI). The RBI’s findings are based on the performance of 2,758 listed Non-Government Non-Financial (NGNF) companies, derived from abridged quarterly financial results.
The operating profit of manufacturing companies experienced a significant deceleration, dropping to 7% in the fourth quarter of the last fiscal year, in contrast to the robust 70% growth observed in the corresponding quarter of the previous fiscal year. Similarly, non-IT services sector companies saw a slowdown in operating profit growth to 6.1% in the fourth quarter of 2021-22, compared to a substantial 62.5% in the same period of the previous year. IT companies also witnessed a decline in operating profit growth, slowing to 5.9% from 19.7%.
The RBI data further highlighted that sales of the 2,758 listed private non-financial companies recorded a healthy year-on-year growth of 22.3% in the fourth quarter of 2021-22, slightly down from 22.8% in the comparable quarter of the previous year. Among the 1,709 listed private manufacturing companies, aggregate sales saw a steady year-on-year growth of 24.6% in Q4, 2021-22, primarily driven by increased sales in industries such as petroleum, non-ferrous metals, iron and steel, chemicals, and textiles.
IT companies continued their growth trajectory with a robust 20.7% growth in sales during the fourth quarter of 2021-22. Meanwhile, non-IT services companies experienced a 20.9% year-on-year expansion in sales in the same period, driven by steady growth in sectors such as transport, trade, telecom, hotels, and restaurants.
Despite the uptick in expenditures, manufacturing companies managed to maintain their operating and net profit margins in the fourth quarter of 2021-22 compared to the previous quarter. Net profit margins remained stable for IT companies, while non-IT services companies recorded negative terrain due to losses incurred by telecom and transport companies, according to the RBI.