Net profit of manufacturing firms in the private sector fell by over 27 per cent year-on-year in July-September quarter compared to 5 per cent drop in the April-June period, data from the Reserve Bank showed today.
According to the data, the net profit of the manufacturing companies fell by 27.4 per cent during the second quarter at Rs 23,000 crore compared to a 5 per cent fall in the first quarter (April-June) at Rs 25,200 crore.
Sales growth during the second quarter was 7.6 per cent higher at Rs 5.57 lakh crore versus a growth of a mere 0.8 per cent to end first quarter at Rs 5.33 lakh crore.
For the services sector (non-IT), profit during the second quarter of FY14 was down by 23.2 per cent at Rs 2,500 crore, while profits fell at a much higher 42.7 per cent rate to Rs 2,600 crore in the previous quarter.
Sales in this segment during the second quarter, however, grew by only 4.9 per cent at Rs 67,800 crore, slower than the growth of 10.8 per cent at Rs 73,300 crore logged in the first quarter.
The Information Technology (IT) sector remained positive with a rise of 26.3 per cent growth in net profit at Rs 11,700 crore during second quarter, versus just 2.4 per cent rise at Rs 8,400 crore in the first quarter.
Its sales rose by 18.9 per cent to Rs 57,300 crore during July-September period against a growth of 13.2 per cent at Rs 56,400 crore during April-June, the data showed.
"The upturn in sales growth is noticeable for the manufacturing and the IT sectors, while slowdown continued in the non-IT services sector," the RBI said.
Among the major industries, sales growth was high in textiles, coke and refined petroleum products, chemicals and chemical product industries.
However, cement and cement products, iron and steel, motor vehicle and transport equipments and machinery industries continued to record contraction in sales.
"The improvement in sales growth was not reflected in profit growth, net profit growth and profit margins," the RBI said.
Overall, net profit covering all the three sectors, was down by 20.5 per cent at Rs 38,200 crore in the second quarter. Profits had fallen by a lower 10.9 per cent to Rs 37,600 crore in the first quarter.
However, the overall sales grew by 7.4 per cent at 7.43 lakh crore during July-Sep versus just a