The private companies in manufacturing sector posted a 24.9 per cent growth in net profit in the October-December quarter of the current fiscal on annual basis, benefitting from lower tax provisions, the RBI said on Wednesday.

The analysis is based on the performance of private corporate sector during the third quarter of 2018-19 drawn from abridged financial results of 2,703 listed non-government non-financial (NGNF) companies, it said.

“The manufacturing sector continued to record strong growth in net profits, benefitting from the lower tax provisions in Q3:2018-19,” the RBI said while releasing the latest data on performance of the private corporate business.

The companies posted a net profit of Rs 77,500 crore in the third quarter of the fiscal compared to Rs 57,800 crore in the year-ago period. Their profit was Rs 71,900 crore in the July-September quarter of 2018-19.

However on the sales front, demand conditions in the manufacturing sector weakened on year-on-year basis.

“This moderation was observed mainly in textiles, iron and steel, motor vehicles and other transport equipments industries whereas sales growth improved for consumer-driven sectors such as food product and beverages, and pharmaceutical,” the central bank said.

The interest expenses incurred by manufacturing sector also witnessed a dip from a year ago level, reflecting ongoing deleveraging in the corporate sector.

In IT sector, RBI said, sales growth remained broadly unchanged in relation to the previous quarter, while the services (non-IT) sector maintained the pace of sales growth, riding on the improvement recorded by the transport and storage services industries.

The telecommunication sector continued to experience contraction in sales.

As per the RBI, pricing power in terms of operating profit and net profit margins remained flat in manufacturing sector.

Net profit margin of the IT sector declined marginally.