Net profit of private firms having FDI declines 22% in FY12: RBI
Steep rise in interest payments in 2011-12 resulted in a decline in net profit, RBI says
Mumbai: Profits of private companies having foreign direct investment (FDI) declined by about 22% during 2011-12 to ₹ 44,424 crore on higher outgo for interest payment, according to Reserve Bank of India (RBI) data.
“Steep rise in interest payments in 2011-12 resulted in decline in net profit (PAT)," RBI said in a release on Thursday.
In its data on finances of non-government non-financial FDI companies, RBI audited annual accounts of select 766 companies which closed their accounts during April 2011 and March 2012. The data pertains to the companies engaged in manufacturing, services and others. The sales of these companies increased by 18.1% to ₹ 8,76.29 crore during 2011-12, the data showed.
The sales growth of FDI companies belonging to services sector improved in 2011-12 over that in the previous year, while it declined for those in the manufacturing sector, RBI said.
Sales of manufacturing companies rose by 16.9% in 2011-12, versus a growth of 19.4% in 2010-11. While, for services sector, the sales were higher in 2011-12 with a growth of 18.7% from a growth of 16.8% in the previous year.
Also, earnigns before interest, tax, deprecation and amortization (Ebitda) for the manufacturing sector declined in 2011-12, whereas for the services sector Ebitda growth registered an increase.
For manufacturing sector, Ebitda declined by 22.4% in 2011-12 from a rise of 7.5% in the previous year. While for services sector the Ebitda was at 11% in 2011-12 from 4.8% in 2010-11.
“Ebitda growth was low or negative in most of the industries in the manufacturing sector. In the services sector computer and related activities and transport and storage service industries led to higher growth in Ebitda," RBI added.
RBI also said that the external sources (other than companies’ own funds) continued to play a major role in business expansion of the select FDI companies in 2011-12. The US, the UK, Germany, Switzerland, Japan, France, The Netherlands and Mauritius were among the countries bringing in investment these companies.
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