Workers test Hero Ignitor motorcycles after final assembly at the Hero MotorCorp Ltd. manufacturing facility in Gurgaon, India (Photographer: Prashanth Vishwanathan/Bloomberg)

Manufacturing Companies’ Sales Improve In Third Quarter, Profit Subdued: RBI

The country’s manufacturing sector witnessed an improvement in sales growth in the third quarter this fiscal on annual basis, though net profit has remained subdued due to lack of support from other income, date released by the Reserve Bank of India showed.

The information technology sector recorded a modest improvement in sales growth, although lower than a year ago, according to RBI data on performance of the private corporate sector. The services (non-IT) sector showed signs of revival as reflected by positive sales growth, it added.

This data is based on abridged financial results of 2,705 listed non-government non-financial companies for the third quarter of 2017-18.

As per the data, sales of manufacturing companies increased by 14 percent in the October-December quarter of 2017-18, compared to the corresponding period of the previous fiscal.

Net profit of the manufacturing companies declined by 2.4 percent in the third quarter, RBI said, adding that lack of support from other/non-operating income resulted in lower net profits for the sector.

Among major manufacturing industries, demand conditions improved for chemical and chemical products; cement and cement products; machinery and machine tools; and motor vehicles and other transport equipment.

“Operating profits of the manufacturing sector were supported by improved demand conditions and continued to record a healthy growth, despite significant increase in input costs,” RBI said.

It further said that pricing power in terms of the net profit margin declined for the manufacturing sector, while it improved for the services (non-IT) sector.