Pricing Power
Manufacturing companies' sales growth declined, margins rose in Q4, RBI report shows
This story was originally published at 19:58 IST on 19 June 2025
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NEW DELHI – Manufacturing companies' aggregate operating profit margin increased slightly to 14.7% in the March quarter from 14.1% a quarter ago even as the on-year sales growth declined to 6.6% in Jan-Mar from 7.7% in the previous quarter, according to a report released by the Reserve Bank of India Thursday. This indicated a rise in pricing power of these companies.
The data by RBI covered 2,936 listed non-government non-financial companies, including 1,659 manufacturing companies. The manufacturing companies' operating profit growth of 8.1% on year in the March quarter was higher than their sales growth, the RBI report said.
However, a few key operating expenses items of the manufacturing companies recorded higher increase than the sales growth in the March quarter, according to the data analysed by RBI. While their raw material expenses rose 8.3% on year the staff costs were up by 10%, the RBI report said. "With sequential rise (year-on-year) in profits, manufacturing companies' interest coverage ratio improved" to 8.7 in the latest quarter from 7.6 in the previous quarter, according to RBI's analysis.
The on-year sales growth also moderated for non-IT services, declining to 10.9% growth in the March quarter from 11.5% in the previous quarter. The operating profit margin of these companies, however, inched up to 23% from 22.6%, the RBI data showed.
The RBI report also gave comparative data for IT companies but it was based on year-on-year growth. Analysts in the equity market analyse IT companies' performance by factoring in the quarter-on-quarter growth rates. End
Reported by Rajesh Gajra
Edited by Deepshikha Bhardwaj
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