Winning Bizness Desk

Mumbai. Over the past decade, Indian companies have shown a remarkable performance, especially when it comes to profitability. Between 2015 and 2025 (projected), corporate profit has grown over 1.5 times faster than sales every year. This trend became even more noticeable after 2020, indicating a strong recovery and growth post-COVID.

Profit growth almost doubled since 2020

Since the outbreak of the COVID-19 pandemic, the gap between revenue growth and profit growth has widened further. While sales grew steadily, profits grew at nearly **double the pace**, reaching around **26% annually**. This clearly shows how efficiently Indian companies adapted post-pandemic, making better margins even during uncertain economic conditions.

Profit margins climbed from 7.8% to 12%

One major reason for the profit surge is the increase in profit margins. In FY 2014-15, the average profit margin stood at just 7.8%, but by FY 2024-25, it is expected to touch 12%. This indicates improved cost efficiency, pricing power, and operational strength across companies.

Sales grew at 9.7%, profit rose at 16% CAGR

From 2015 to 2025, the compound annual growth rate (CAGR) of sales stood at 9.7%, while net profit grew at 16% CAGR. Post-COVID, between 2020 and 2025, this gap widened even further — with sales rising by 12.7% annually and net profits shooting up by 25.7% per year on average.

Pre-tax margin also improved, excluding key sectors

The net profit margin of listed companies rose from 5% to 8.8% in 10 years, even after excluding major sectors like banking, financial services, insurance, oil & gas, and IT. Including these, the average profit margin of Indian corporates crosses 12%, showing an even more impressive overall performance.

Big companies gained from market exits of smaller players

According to Dhananjay Sinha, Co-Head at Systematix Institutional Equities, profit margins have touched their highest levels in 25 years across most sectors. He explained that large companies gained market power due to acquisition of smaller firms and exit of many small and mid-sized businesses. This allowed them to increase prices more freely. Three major reasons behind this shift:

* Small firms struggled to adapt to GST regulations.

* IBC laws made it easier to acquire stressed companies.

* COVID-led lockdowns forced many undercapitalized small companies to shut down.

7 Key Pointers in a Nutshell

• Profit growth has been 1.5 times faster than sales in the last 10 years.
• Post-2020, profit grew at 26% annually, double the sales growth.
• Corporate profit margins rose from 7.8% to 12% since 2015.
• Sales grew at 9.7% CAGR; profit at 16% CAGR over 10 years.
• Net profit margin improved from 5% to 8.8%, excluding major sectors.
• Big firms gained dominance as smaller ones shut or got acquired.
• GST, IBC laws, and COVID lockdowns accelerated the exit of small businesses.