Corporate Profitability Under Pressure In FY25 Despite Sales Growth: CareEdge Report
The profitability of India’s non-financial companies declined in Financial Year 2025 (FY25), even as they recorded stronger sales growth, according to a report by market intelligence firm CareEdge. The report stated that net sales grew by 7.7% year-on-year (YoY) in FY25, a significant improvement compared to 3.7% YoY growth in FY24. However, the overall expenditure surged by 8.1% YoY in FY25, sharply up from 1.8% YoY in the previous year. The increase in expenses, primarily driven by rising input costs, offset the gains from sales growth and weighed heavily on the companies’ profitability.
CareEdge highlighted that the steep rise in service and raw material costs played a major role in increasing corporate spending. These input costs jumped by 9.9% in FY25, in contrast to the 0.8% growth recorded in FY24. This surge emerged as a significant driver of overall expenditure, further tightening profit margins for companies. In addition, the report pointed out a slowdown in employee cost growth, which it described as a concern from a broader demand outlook. It noted that anecdotal evidence indicated a mixed trend in urban consumption, impacting overall business sentiment.
As per the CareEdge report, the increase in input costs directly contributed to a sharp moderation in operating profit growth, which dropped to 6.4% in FY25 from 15.3% in FY24. The weakened operating performance also impacted the bottom-line, with profit after tax (PAT) growth falling to 6.4% in FY25, down from 14.5% in the previous year. The report emphasized that these numbers reflect the pressure non-financial firms are currently facing. It attributed part of the weak recovery to disruptions seen in the first half of the year, especially those related to the general elections.
Despite the challenges, CareEdge stated that corporate profitability has improved from the lows seen in early FY25, where election-related disruptions hampered growth. However, it described the ongoing recovery as “modest” and in need of closer monitoring. The report concluded by stressing the importance of a strong recovery in consumption, which it identified as crucial for any significant pickup in private capital expenditure in the near term. CareEdge’s insights underline the tightrope Indian corporates are walking between growth momentum and cost-related pressures.
(From ANI)
Aishwarya is a journalism graduate with over three years of experience thriving in the buzzing corporate media world. She’s got a knack for decoding business news, tracking the twists and turns of the stock market, covering the masala of the entertainment world, and sometimes her stories come with just the right sprinkle of political commentary. She has worked with several organizations, interned at ZEE and gained professional skills at TV9 and News24, And now is learning and writing at NewsX, she’s no stranger to the newsroom hustle. Her storytelling style is fast-paced, creative, and perfectly tailored to connect with both the platform and its audience. Moto: Approaching every story from the reader’s point of view, backing up her insights with solid facts.
Always bold with her opinions, she also never misses the chance to weave in expert voices, keeping things balanced and insightful. In short, Aishwarya brings a fresh, sharp, and fact-driven voice to every story she touches.
Cristiano Ronaldo vs Lionel Messi: When Could Portugal Face Argentina At FIFA World Cup 2026?
Cristiano Ronaldo and Lionel Messi could face each other in a highly anticipated clash at…
The rumours began when Usha Vance appeared without her ring during visits to Camp LeJeune…
Amid IndiGo Flight Cancellations, Indian Railways To Bring Big Relief For Commuters, Set To Deploy…
IndiGo, India’s largest airline, has been cancelling flights for four consecutive days, creating widespread inconvenience…
