Mumbai: Net profits of listed private sector companies in non-financial businesses contracted sharply by 21.2% in the first quarter of 2017-18 due to high cost of raw material, power and fuel, RBI data showed on Wednesday.

Net profit of the companies totalled Rs44,700 crore in the first quarter of the current fiscal. They had posted a growth of 11.2% in the similar period of last fiscal.

The Reserve Bank of India (RBI) has compiled and released data based on abridged financial results of 2,744 listed non-government non-financial (NGNF) companies in April-June period of 2017- 18.

As per the report, sales growth (Y-o-Y) of manufacturing companies remained robust in Q1, led by industries like cement and cement products, iron and steel, electrical machinery and apparatus and food products and beverages.

The IT sector witnessed further decline in sales growth. Sales of the services sector companies (other than IT) witnessed a turnaround after four successive quarters of contraction mainly due to the wholesale and retail trade and transport and storage services companies.

“At the aggregate level and for the manufacturing sector, raw material expenses growth remained high albeit with some moderation in relation with the previous quarter, while staff costs growth accelerated for the services (other than IT) sector," RBI said.

Sharp increase in the cost of raw material led to heavy contraction in operating profits for the manufacturing sector. Also, the services (other than IT) sector and the IT sector recorded lower operating profit as compared to the first quarter of 2016-17.

“Barring the IT sector, net profits contracted heavily despite some support from other income," it said.

The data revealed that expenditure on raw material, staff and power and fuel in the first quarter of the fiscal increased by 13.1%, 6% and 16.5%, respectively. Referring to the pricing power of the companies, the RBI said the operating profit margin declined for the manufacturing and services (other than IT) sectors, while that for the IT sector recorded an improvement.