Operating Profits of Manufacturing Companies Declined in Q4 of 2019-20: RBI

Operating profits of manufacturing firms declined in the January-March quarter of 2019-20 on account of lower sales, as per a Reserve Bank analysis of listed non-government non-financial (NGNF) companies. The operating profits of services companies (IT and non-IT) decelerated due to moderation in sales growth during the last quarter of 2019-20, it said.

The analysis is based on the abridged quarterly financial results of 2,620 listed NGNF companies. “Sales of manufacturing sector companies declined by 15.6 per cent (Y-o-Y) in Q4:2019-20 as compared with 5.9 per cent growth in Q4:2018-19; this contraction was broad based across industries,” it said.

The RBI further said services sector companies recorded deceleration in activities. “Lower sales led to decline in operating profits of manufacturing companies in Q4:2019-20; operating profits of services companies (IT and non-IT) also decelerated due to moderation in sales growth,” it said. It also said subdued production related activities resulted in lower expenditure on raw materials for the manufacturing sector in the quarter under review.