The sales growth of corporates improved in Q4 FY25. While sales growth saw improvement, an uptick in expenditure led by rising input prices has resulted in a moderation in corporate profitability growth in the quarter. For the full fiscal year FY25, the financial performance of the corporates was affected by a confluence of factors such as escalating geopolitical tensions, commodity price volatility, election related disruptions and mixed outlook on urban demand. A contraction in profitability in H1 FY25 affected full-year performance significantly.

This report presents an analysis of the corporate performance of listed non-finance companies. Part I of the study looks at the quarterly performance of 1011 companies. Section (A) provides an overview of the aggregate performance of these companies, whereas Section (B) presents a snapshot of the sectoral performance of select 21 sectors (See Annexure 1 for details). Part II of the study provides a snapshot of the annual earnings results of 810 listed non-finance companies. In Part III, we look at the growth in employee costs of various sectors to draw inferences about the consumption demand.

Way Forward

• We expect corporate performance to improve going ahead. While rural demand has held up well, supported by robust agricultural production, the outlook for urban demand continues to remain mixed. Prospects of an above-normal monsoon have brightened the outlook of rural demand as it will support farm output and lower food inflation. However, it will be crucial to monitor the temporal and spatial distribution of the monsoon. Additionally, the consumption scenario is anticipated to gain due to factors such as lower tax burden, benign inflation and RBI rate cuts. While the overall public capex push is expected to be sustained, a strong recovery in consumption is also imperative for a pickup in private capital expenditure.
• External headwinds—including global policy uncertainty, trade tensions, sluggish global growth, and geopolitical risks—will continue weighing on domestic growth prospects. Even though global commodity prices have eased following concerns about global growth prospects, the recent rise in geopolitical tensions in the Middle East has resulted in a sharp uptick in global energy prices and needs to be monitored closely.
• The overall performance of corporates in the coming quarters will depend upon the unfolding of the global growth scenario and any external risks associated with geopolitical tensions, trade policy uncertainties, commodity price shocks. While lower interest rates will be a supporting factor, domestic demand conditions will play a critical role in overall corporate performance in the coming quarters.