"There has been a marginal year-on-year (Y-o-Y) decline of 1.8 percentage points in the rate of growth of net profit mainly due to slow macroeconomic conditions both domestically and globally," Assocham said in a statement.

A substantial cut in total expenses has resulted in "limited moderation in profits" and though there has been a decline in both expenditure and sales, the rate of decline in expenditure is higher than rate of decline in sales which led to this meager 1.8 percent fall in total profits, it said.

While growth in net sales declined, the cost of raw materials also dipped as companies have adopted efficient cost-management systems. Besides, interest payments have also reduced, the Assocham study showed. "Large Indian corporate firms have benefitted from cheap imported raw materials as input prices remained down in global markets. Cheap cost of credit raised in foreign markets has also proved lucrative for them," Assocham secretary general DS Rawat said.

The manufacturing sector has continued to stay under pressure. Their net sales dipped from 14 percent to 12.8 percent while growth in total expenditure declined from 15.8 percent to 11.8 percent. "Even profit rates declined by 3.9 percent during the aforesaid period," Assocham said.


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