MUMBAI: Both listed manufacturing and IT companies saw a sharp deceleration in operating profits in Q4FY22 from a year ago.
A rise in raw material expenses in the case of manufacturing firms and staff costs across IT companies was behind this deceleration, an RBI release on the performance of private corporates business sector shows.
Operating profit, defined as the value of production minus expenditure, of 1,709 manufacturing companies grew just 7% through Rs 1.5 lakh crore in Q4 against 70% a year ago for 1,633 companies and 11.8% for 1,701 companies in the preceding quarter.
The slower profitability growth was because expenditure in Q4 for these companies rose by 27.4% against 23.9% growth a year ago (FY21). The main reason behind the jump in expenses was raw material cost, which rose by 32.8% at Rs 5.46 lakh crore against a 31.3% rise a year ago. Power and fuel costs rose.