The Reserve Bank of India today released the October 2015 issue of its monthly Bulletin. The Bulletin includes the Fourth Bi-monthly Monetary Policy Statement for the year 2015-16, Monetary Policy Report-September 2015, Speeches by the Top Management and Current Statistics. This issue also includes two articles: (1) Performance of Private Corporate Business Sector during 2014-15; and (2) Performance of Non-Government Non-Banking Financial and Investment (NGNBF&I) Companies: 2013-14.

1. Performance of Private Corporate Business Sector during 2014-15

The article has been prepared on the basis of abridged financial results of 2,925 listed non-government non-financial (NGNF) companies. Besides giving an insight on evolving trends in sales, expenditure, growth and profit margins, the article provides a brief analysis of performance based on size and major industry groups. The ‘Explanatory Notes’, containing the brief methodology followed for compilation of data and glossary of terms, are given at the end.

Highlights:

Sales growth:

• Sales growth (Y-o-Y) of the private corporate sector continued to moderate in 2014-15 for the fourth consecutive year. The manufacturing sector stagnated and IT sector decelerated sharply in terms of sales.

• Decline in sales growth was primarily caused by the steep fall in oil prices.

• Barring petroleum product companies, aggregate sales growth improved marginally for the first time in five years.

Expenditure:

• During 2014-15, the international commodity prices were on a downward spiral, lowering the cost of raw materials to sales ratio.

• As a result, a sharp deceleration in overall expenditure growth was witnessed.

Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA):

• EBITDA growth improved during 2014-15 on account of lower growth in expenditure.

• A noticeable turnaround has been recorded in terms of EBITDA and net profits growth by the Non-IT service sector.

• EBITDA margin improved for the manufacturing and non-IT sector but it has decreased slightly for IT sector.

Industry Performance:

• Risk profile worsened for the textile and iron & steel industries due to higher interest burden and contraction in net profit. Among the major industries, cement, motor-vehicles and machinery showed weak signs of recovery.

Quarterly Performance:

• An analysis of common companies over past eight quarters showed contraction of sales and net profits.

The data pertaining to the performance of the non-financial private corporate business sector during 2014-15 was earlier released on the RBI website vide press release No. 552 on September 1, 2015 (https://www.rbi.org.in/scripts/ BS_PressRelease Display.aspx?prid=34870).

2. Performance of Non-Government Non-Banking Financial and Investment (NGNBF&I) Companies: 2013-14

This article presents the analysis of performance of Non-government Non-banking Financial and Investment (NGNBF&I) companies during the year 2013-14 based on the audited annual accounts data of 18,225 companies. The study presents a comparable picture over a period of three years from 2011-12 to 2013-14.

Major findings:

• Growth in financial income decelerated during 2013-14 mainly due to modest growth in interest income.

• The growth in operating profit i.e., Earning before Depreciation and Taxes (EBDT) and net profit declined significantly in 2013-14. However, the operating profit margin, return on assets and return on shareholders’ equity increased marginally in 2013-14. Operating profit margin, return on assets and return on equity of Chit Fund and Mutual Fund companies declined gradually over the past three years (i.e., 2011-12 to 2013-14).

• The share of long-term borrowings in total liabilities of select NGNBF&I companies increased during 2013-14. The share of shareholders’ funds continued to fall gradually over the three years period.

• On the assets side, the share of long-term loans and advances in total assets improved during 2013-14. The share of non-current investment in total assets declined, while that of current investment improved marginally in 2013-14.

• The NGNBF&I companies continued to rely mainly on external sources for their business expansion; their share in total sources of funds, however, decreased marginally in 2013-14. The funds raised through debt finance (including short-term borrowings) decreased marginally in 2013-14. The select NGNBF&I companies predominantly used their funds for expanding their long-term loans portfolios.

The data pertaining to the performance of Non-Government Non-banking Financial and Investment (NGNBF&I) companies for 2013-14 was released on the RBI website vide press release No. 625 on September 9, 2015 /en/web/rbi/-/press-releases/performance-of-non-government-non-banking-financial-and-investment-ngnbf-amp-i-companies-2013-14-data-release-34942.

Sangeeta Das
Director

Press Release : 2015-2016/875