Net profit of non-government non-financial cos continued to contract in 2014-15: RBI

MUMBAI: Net profit of non-government non-financial (NGNF) companies continued to contract in 2014-15, but at a lower rate compared with previous year due to "huge improvement in services (non-IT) sector".

The net profits of the companies showed a contraction of 0.7 per cent as against -5.1 per cent in 2013-14, as per the data on performance of private corporate business sector during 2014-15, according to RBI data.

Sales performance of services (non-IT) improved in 2014-15 compared with previous year. Similarly, mining and quarrying industry group also recovered.

"However, decline in performance of the manufacturing and IT sector pulled down aggregate sales growth of non-government non-financial companies in 2014-15. In particular, petroleum products industry group recorded a sharp contraction in sales growth," RBI said in a notification.

On expenditure, it said reduction in the growth rates of raw material expenses and staff cost caused a decrease in aggregate expenditure growth in 2014-15.

The data also said pricing power, as measured by EBITDA margin remained range-bound.

EBITDA (Earnings before Interest Tax, Depreciation and Amortisation) increased at the aggregate level due to improved performance of services (non-IT) sector.

The data is based on abridged financial results of 2,925 listed non-government non-financial (NGNF) companies.