Performance of the Private Corporate Sector in Q3: 2024-25

The Reserve Bank of India (RBI) has released data on the financial performance of the private corporate sector for the third quarter (Q3) of 2024-25. The data is based on the abridged quarterly financial results of 2,924 listed non-government non-financial companies. To provide a comparative perspective, figures for Q3: 2023-24 and Q2: 2024-25 are also included, enabling an analysis of both sequential (quarter-on-quarter) and annual (year-on-year) changes. The detailed report is available at RBI’s data portal.

Key Highlights

Sales Growth

• The overall sales of listed private non-financial companies grew by 8.0% (y-o-y) in Q3: 2024-25, improving from 5.4% in the previous quarter and 5.5% in the same quarter last year.
• Sales growth of 1,675 listed manufacturing companies rose to 7.7% in Q3 from 3.3% in the previous quarter, driven by strong performance in automobiles, chemicals, food products, and electrical machinery. However, petroleum, iron & steel, and cement industries saw a decline in sales (Tables 2A and 5A).
• IT companies recorded 6.8% (y-o-y) sales growth, up from 3.2% a year ago (Table 2A).
• Non-IT services companies posted 11.5% sales growth (y-o-y) in Q3: 2024-25, following 12.9% growth in the same quarter last year (Table 2A).

Expenditure Trends

• Raw material expenses for manufacturing companies increased by 6.3% (y-o-y) in line with sales growth, while staff costs rose at a higher rate of 9.5%.
• Staff costs for IT and non-IT services companies grew by 5.0% and 12.4%, respectively (Table 2A).
• The staff cost-to-sales ratio for manufacturing, IT, and non-IT services companies moderated to 5.7%, 47.9%, and 10.3%, respectively, in Q3: 2024-25 (Table 2B).

Profitability and Pricing Power

• The operating profit margin of listed non-financial companies improved sequentially by 50 basis points to 16.2%, with gains seen across sectors (Tables 1B and 2B).

Interest Expenses and Financial Stability

• The interest coverage ratio (ICR) of manufacturing companies declined slightly to 7.6 in Q3: 2024-25, compared to 7.9 in the previous quarter.
• The IT sector maintained a very high ICR (above 40), while non-IT services companies’ ICR exceeded 2, marking the first time in 32 quarters that their earnings before interest and tax (EBIT) were more than double their interest payments (Table 2B).

The data indicates continued recovery in the private corporate sector, with improved sales growth, stable profitability, and strong financial metrics across key industries.