New Delhi: Corporate sales in India rebounded sharply following the pandemic, peaking at 32.5 per cent growth in 2021-22 after the contraction during COVID-19, before stabilising at 7.2 per cent in 2024-25, according to the Reserve Bank of India’s (RBI) October Bulletin.

Net profits rose significantly to Rs 7.1 trillion in 2024-25 from Rs 2.5 trillion in 2020-21, while net profit margins improved to 10.3 per cent from 7.2 per cent over the same period.

Corporations continued to deleverage their balance sheets, supported by higher profit capitalisation, with debt-to-equity ratios improving across all firm sizes. The interest coverage ratio for manufacturing firms also strengthened, averaging 7.7 post-COVID, reflecting robust debt-servicing capacity.

Large firms were the main drivers of profitability, while medium and small firms showed greater improvement in debt-servicing ability than their larger counterparts.

India’s private corporate sector demonstrated notable resilience amid the economic disruptions caused by the pandemic and weak domestic demand during 2019-20. The post-pandemic recovery was fuelled by fiscal and monetary support, pent-up demand, and effective cost management.

“Operating profit margins remained resilient, with large firms consistently outperforming medium and small enterprises. Despite challenges, cost optimisation strategies helped businesses sustain profitability. The manufacturing sector maintained stable profit margins, while non-IT services, after initial volatility, rebounded strongly. IT sector growth remained steady throughout,” the Bulletin noted.

Medium and small firms’ enhanced debt-servicing capacity contributed to overall financial stability.

“With a robust financial foundation and adaptive strategies, the sector remains well-placed to capitalise on future opportunities and contribute to sustained economic expansion. Looking ahead, sustaining corporate growth will largely depend on a combination of factors such as macroeconomic conditions, domestic demand, supportive policy measures, and global market dynamics,” the RBI highlighted.

The Bulletin also stressed that strengthening supply chains, improving cost efficiencies, and fostering technological innovation will be key to sustaining competitiveness and shaping overall corporate performance.

IANS