The analysis of the financial performance of select 16,923 non-government non-financial (NGNF) public limited companies for the financial year 2014-15 based on their audited annual accounts closed during April 2014 to March 2015 shows that mining sector, ‘textiles’, and ‘iron and steel’ industries in the manufacturing sector, electricity sector and ‘telecommunications’ industry in the services sector were the worst affected in terms of sales growth during the period in focus.
This has been highligthed by the Reserve Bank of India in its May 2016 Monthly Bulletin released today. The bulletin goes on to underscore that barring the mining, electricity and construction sectors, the operating profit margin improved in other sectors in 2014-15. The 16,923 companies, whose performance has been analysed accounted for 29.5 per cent of population paid-up capital.
The aggregate results of the select NGNF public limited companies in 2014-15 revealed moderation in sales growth and improvement in net profit growth. The growth in gross value added (GVA) also improved marginally to 10.5 per cent in 2014-15 as against 10.4 per cent in 2013-14.
Leverage ratio of the select companies continued to increase while interest coverage ratio (ICR) stabilised in 2014-15. Electricity and construction sector and ‘transportation’ industry in services sector witnessed high total borrowings to equity ratio.
Of the total companies, 9.1 per cent companies had their leverage ratio more than 200 per cent and ICR less than one or negative net worth. Such companies accounted for 21.8 per cent of total bank borrowings of select 16,923 companies in 2014-15.
Share of funds raised through external sources by the companies declined in 2014-15 whereas share of funds used for fixed assets formation was higher in 2014-15 while that for non-current investments was lower as compared to the previous year.