Raw material expenses of listed manufacturing companies jumped 27.5% YoY in Q1 FY27 amid global supply chain disruptions.
Manufacturing sales growth accelerated to 21.4%, while operating profit growth more than doubled to 21.3%.
Operating profit margins improved across major sectors on a sequential basis, RBI said.
Global Supply Chain Disruptions Push Raw Material Costs Of Manufacturers Up 27.5% In Q1 FY27: RBI
Manufacturing firms maintain pricing power and improve profitability despite a sharp rise in raw material costs in Q1 FY27, RBI data shows
Moneycontrol
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Raw material expenses of listed manufacturing companies rose sharply by 27.5% year-on-year (YoY) in the first quarter of FY27 amid global supply chain disruptions, the RBI said on Thursday.
However, the firms were able to maintain pricing power and also improved profitability.
The RBI said the raw material-to-sales ratio declined marginally to 58.1% in Q1 FY27 from 58.5% in the previous quarter.
Despite an increase in input costs, operating profit growth of manufacturing companies improved significantly to 21.3% YoY during Q1 FY27 from 9.4% in the previous quarter.
Operating profit growth of IT and non-IT services companies also rose to 19.9% and 12.7%, respectively.
Operating profit margins improved across all major sectors on a sequential basis, RBI said.
The data, based on the quarterly financial results of 3,247 listed non-government non-financial companies, showed that aggregate sales growth accelerated to 19.4% in Q1 FY27 from 13.9% in the previous quarter.
Sales of 1,827 listed manufacturing companies grew 21.4% YoY, up from 14.5% in the preceding quarter, driven mainly by automobiles, petroleum and electrical machinery industries.
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Information technology companies posted sales growth of 14.8% during the quarter, while non-IT services firms recorded growth of 19.7%, led by wholesale and retail trade.
Staff costs also increased across sectors, rising 12.4% for manufacturing companies, 7.6% for IT firms and 11.2% for non-IT services companies.
The interest coverage ratio of manufacturing companies improved to 10.2 in Q1 FY27 as growth in gross profits outpaced the rise in interest expenses, while the ratio for non-IT services firms increased to 2.6.