In addition to lower interest costs, a reduction in tax liability has boosted companies' profits

MUMBAI: Despite a five per cent decline in sales in the last financial year, Indian companies have doubled their profit after tax. Tax cuts and lower interest rates have boosted profits.

According to a report prepared by SBI, sales of 4,000 listed companies declined by 5 per cent in the last financial year, but interest, depreciation, tax and debt declined by 9 per cent in pre-tax revenue and 107 per cent in post-tax profit.

In the last financial year, 2020-201, companies in 12 sectors reduced their debt by Rs 2.10 lakh crore.

Debt of companies in refineries, steel, textiles, mining and other sectors has declined by 3 to 4 per cent in the last financial year.

In addition to the reduction in the effective tax rate, lower interest rates were proving to be a boon for Indian companies during the Corona period last year. The effective tax rate for FY2050, which was 5 per cent, was reduced to 5 per cent for the last financial year.

However, with the increase in revenue of companies, the number of tax payments increased by more than Rs 20,000 crore.

Money costs declined but higher commodity prices pushed up the spending of companies in the metals and agrochemicals sector, the report said.

Long-term accommodative monetary policy by the Reserve Bank has been conducive to the good results of companies.