Corporate profits up nearly threefold since pandemic

Corporate profits climbed to 7.1 trillion in 2024-25 from %2.5 trillion in FY21 as post pandemic pent-up demand drove growth in sales, according to a research paper in Reserve Bank of India’s (RBI's) bulletin.

- AATHIRA VARIER

Consequently, net profit margins improved and reached double-digit level in FY25, driven by the manufacturing sector.

According to the report, the weak domestic economic activity underpinned by sluggish private consumption during 2019-20 and the pandemic overblew the situation, causing a contraction in sales and profitability. However, the corporate sector rebounded strongly thereafter, supported by fiscal and monetary policies, pandemic led pent up demand, and effective cost management.

While net profit margin of IT sector moderated during the post-pandemic period due to slowdown in activities coupled with higher salary outgo, net profit margin of non-IT service sector remained in the negative zone since Covid before returning into positive territory in FY24.