Mumbai, Dec 3: Sales growth of select Foreign Direct Investment (FDI) companies shrunk to 10.2 per cent in 2013-14 against 14 per cent in the previous financial year, according to RBI data. “Sales growth of select FDI companies along with value of production and operating expenses moderated in 2013-14,” RBI said in its data on ‘Finances of Foreign Direct Investment (FDI) Companies, 2013-14’.
The data has been compiled based on audited annual accounts of 957 select non-government non-financial (NGNF) FDI companies which closed their accounts during the period April 2013 to March 2014. The data draws a comparative picture over the three year period 2011-12 to 2013-14 based on a common set of companies. The growth in Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) and net profits improved in FY14 mainly due to moderation in manufacturing and interest expenses supported by a decline in import growth and increase in export growth. (Also Read: RBI may cut rates at February review: BofAML)
Merchandise exports grew at higher rate of 22 per cent in the reporting year as against 15.3 per cent in FY13. Whereas, imports growth for select FDI companies declined to 10.2 per cent in 2013-14 from 16.2 per cent in the previous financial year. Growth in total borrowings of select FDI companies increased to 14.3 per cent in FY14 from 11.2 per cent in FY13. However, borrowings from banks contracted by 0.2 per cent compared to the previous year.
The growth in total net assets of select FDI companies increased marginally by 13.8 per cent in FY14 vis-a-vis 11.3 per cent registered in the previous year. However, the share of gross fixed assets in total assets declined marginally in FY14 as compared to the previous year. The share of long-term borrowings in total liabilities increased marginally in the year while the share of short-term borrowings decreased marginally, resulting in an unchanged leverage ratio of select FDI companies in FY14 from that in FY13.
Profit retained as a percentage of profit after tax for select FDI companies declined to 59.6 per cent in FY14 as compared with 62.8 per cent in FY13, mainly due to increase in amount of dividends paid to the shareholders, the data showed. These companies relied mainly on external sources of funds for expanding their business and these funds were predominantly used for asset formation mainly in capital work-in-progress as well as in intangible assets and long-term investments in equity shares, RBI data showed.