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20-Mar2018

Manufacturing companies' sales improve in Q3FY18; net profit subdued: RBI

The Reserve Bank of India's (RBI) data on performance of the private corporate sector has showed that India's manufacturing sector witnessed an improvement in sales growth in the period October-December 2017-18 (Q3) on annual basis, however net profit has remained subdued due to lack of support from other/non-operating income. It noted that during Q3 of FY18, manufacturing companies' sales surged by 14 percent as compared to similar period of the previous fiscal, while net profit of these companies declined by 2.4 percent.

According to the data, the information technology (IT) sector also registered modest improvement in sales growth, although lower than in the previous year. It also noted that the services (non-IT) sector showed signs of revival as reflected by positive sales growth. Besides, it pointed out that 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.

The data further stated that 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. It also 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. 


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