India's Corporate Profit-To-GDP Standing Tall At A 17-Year High — Read Motilal Oswal's Analysis

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Motilal Oswal Report

As the world grapples with geopolitical challenges, sluggish growth, high inflation, and elevated interest rates, India’s macroeconomic indicators present a contrasting narrative. The country is experiencing strong GDP growth, a stable currency, and moderating inflation and interest rates, alongside robust corporate earnings.

For the first time in many years, corporate earnings are tracking GDP growth, resulting in the corporate profit-to-GDP ratio remaining flat YoY at a 17-year high of 4.7% in FY25.

This stable ratio was primarily driven by a healthy 10.5% YoY profit growth in FY25, building on a strong earnings base of 30% YoY in FY24, which was broadly aligned with the year’s revenue growth.

This performance was bolstered by a robust GDP growth of 9.8% YoY in FY25, following a high base of 12% YoY growth in FY24.

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