Private Corp Sector’s Net Profit Rises By 14.2% YoY in Q1FY25: Report

On the back of an improvement in sales growth, the net profit of the private corporate sector during the first quarter of the current financial year (Q1FY25) rose by 14.2 per cent on a year-on-year (YoY) basis. As per the data from the Reserve Bank of India (RBI), the aggregate sales growth of the listed private non-financial companies stood at 6.9 per cent YoY during the quarter, higher than the 2.1 per cent growth a year ago.

The data revealed that manufacturing, information technology (IT), non-IT services, construction, electricity and mining witnessed growth in sales as compared to the same period during the last year. However, the sales of cement, iron and steel, fertilisers paper products within the manufacturing sector remained on the lower side.

The operating profit rose by 9.6 per cent YoY during Q1FY25. As per the data, the operating profit of the companies in manufacturing, IT and non-IT services rose by 9.3 per cent, 5.1 per cent and 6 per cent, respectively, during the previously concluded quarter. The operating profits of the listed companies in the electricity and gas supply sectors reported a much higher growth of 28.6 per cent.

As far as the interest coverage ratio (ICR) is concerned, the ICR of manufacturing companies improved to 7.9 per cent, while the non-IT companies saw their ICR improving marginally to 1.8 per cent during the first quarter of FY25. On the other hand, the ICR for the IT companies remained elevated at 42.9 per cent.

The manufacturing companies saw their expenses on raw materials rise by 6.4 per cent on a YoY basis and their staff costs also reported an increase of 10.7 per cent during the first quarter of FY25. The staff cost-to-sales ratio for manufacturing companies came in at 5.8 per cent, while the same for IT and non-IT services companies stood at 49.1 per cent and 11 per cent, respectively, during the quarter. The data from the RBI has been taken from the quarterly financial results of 2,934 listed non-government non-financial companies.