Despite pressures from rising input costs, manufacturing companies’ net profits increased by 50.2% in 2021-2022, the Reserve Bank of India reported. All three sectors maintained healthy operating profit margins.
Further analysis of the data revealed that private corporate sales and profitability experienced healthy growth in 2021-2022 as the Covid–19 pandemic’s effects faded and economic activity picked up, particularly in the second half of the year.
According to the report, Sales of 1,865 listed private manufacturing companies experienced broad-based recovery and expanded by 36.7% during 2021-22 as compared to a contraction of 2.8% in the preceding year; both volume and price components contributed to the higher growth and it was also aided by favourable base effects.
Additionally, IT companies performed better, and their sales growth accelerated to 19.8% from 4.4% the year before. The RBI stated that Consistent with the rise in production and sales, manufacturing companies’ expenditure on raw materials increased by 48.6% during the year and its share in their total sales increased. According to the RBI, interest rates for businesses in the manufacturing and IT sectors decreased throughout the year.
