ANI mumbai

The profit growth of Indian companies slowed down in the financial year 2024-25, as soft demand, weak top-line performance, and slowing capital expenditure weighed on overall corporate performance, says a report by Nuvama Research.

According to the report, the aggregate profit after tax (PAT) for companies in the BSE500 index (excluding Oil Marketing Companies) grew just 10% year-on-year in Q4FY25, and 9% for the full FY25, down from a stronger 21% growth recorded in FY24. The report said "Q4FY25 PAT growth for BSE500 (ex-OMCs) rose to 10% YoY (Q3FY25: 8%), though top line stayed weak, due to cost rationalisation (wage bill growth just 5%) and a low base".

In Q4FY25, profits grew 10 per cent from the same quarter last year, slightly better than the 8% growth seen in Q3FY25. This was achieved mainly through cost-cutting measures, including a modest 5% growth in wage bills, and the benefit of a low base.

While sectors like metals, telecom, chemicals, and cement posted improved profits, segments such as public sector banks and industrials, which had led growth in FY24, saw a slowdown. The report also pointed out a significant drop in capital expenditure (capex) growth. Despite strong operating cash flows, India Inc's capex grew just 6% in the second half of FY25, compared to 20% growth seen in FY23 and FY24.