Mumbai, Jan 16 (Agencies): Corporate India is expected to report only a seven per cent rise in net profits due to slowdown in profit growth of manufacturing sector during Financial Year-2011, according to Centre for Monitoring Indian Economy (CMIE).

The corporate India's expected seven per cent rise in net profit is much lower than the 29 per cent growth in net profits clocked in FY 10.

The main culprit behind the slowdown in profit growth will be the manufacturing sector. Its net profits are expected to fall by 2.1 per cent in 2010-11, as the companies try to partially absorb the sharp increase in raw material prices and wage bill, CMIE said in a report.

The financial services and non-financial services sectors are expected to report 24.6 per cent and 12.5 per cent increase in net profits, respectively, it said.

In fact, corporate India is expected to do better on the sales front in FY 11. Growth in corporate sales in expected to accelerate to 18.8 per cent in FY 11 from a meager six per cent in FY 10, the research agency said.

The sales growth during the year will be mainly driven by the 20.2 per cent rise in sales of the manufacturing sectors. Sales of the financial services sector are expected to grow by 17.2 per cent and that of the non-financial services sector by 16.2 per cent.

CMIE expected corporate sales to grow by 18.5 per cent in the March 2011 quarter. However, a meager one per cent growth in the other income is expected to restrict the growth in corporate profits to 14.5 per cent.