New Delhi, Oct 21 (NationPress) Corporate sales in India have experienced a remarkable resurgence following the pandemic, achieving a peak growth of 32.5 percent in 2021-22 compared to the downturn observed during the pandemic, and subsequently stabilizing at 7.2 percent in 2024-25, as detailed in the latest RBI Bulletin.

Net profits surged to Rs 7.1 trillion in 2024-25, up from Rs 2.5 trillion in 2020-21. As a result, the net profit margin improved to 10.3 percent in 2024-25, a rise from 7.2 percent in 2020-21.

Companies have continued to reduce their debt levels, aided by the capitalization of increased profits, leading to improved debt-to-equity ratios across various firm sizes. The interest coverage ratio for manufacturing firms significantly improved, averaging 7.7 during the post-COVID era, indicating a strong debt-servicing capacity, according to the RBI’s October Bulletin.

Large corporations were the primary contributors to profitability, although medium and small enterprises showed greater enhancements in their debt servicing capabilities compared to larger counterparts.

India's private corporate sector has displayed considerable resilience and adaptability in the face of economic challenges posed by the COVID-19 pandemic.

While sluggish domestic economic activity, exacerbated by weak private consumption during 2019-20 and the pandemic, led to a significant decrease in sales and profitability, the corporate sector rebounded robustly, bolstered by fiscal and monetary policies, pent-up demand, and effective cost management.

“Operating profit margins remained robust, with large enterprises consistently outperforming medium and small businesses. Despite existing challenges, cost optimization strategies have enabled companies to maintain profitability. The manufacturing sector retained stable profit margins, while non-IT services, after initial fluctuations, saw a strong recovery. The growth of the IT sector remained consistent throughout,” noted the Bulletin.

Medium and small firms improved their debt servicing capabilities, contributing to overall financial stability.

“With a strong financial base and adaptive strategies, the sector is well-positioned to seize future opportunities and foster sustained economic growth. Moving forward, the sustainability of corporate growth will hinge on a mix of factors, including macroeconomic conditions, domestic demand, supportive policy measures, and global market trends,” emphasized the Bulletin.

Furthermore, enhancing supply chains, boosting cost efficiencies, and encouraging technological innovations will be crucial in maintaining competitiveness and influencing overall corporate performance,” it added.