4,000 listed firms report robust profit growth driven by efficient cost management and moderated employee expenses.
New Delhi, December 16: Approximately 4,000 listed companies in India recorded a modest 6% growth in revenue during the financial year 2024, according to a report by the State Bank of India (SBI). However, the companies demonstrated a strong performance in profitability, with a 28% rise in earnings before interest, taxes, depreciation, and amortization (EBIDTA) and a 32% increase in profit after tax (PAT).
The report emphasized a significant focus on cost management, with employee expenses showing a tempered growth of 13% in FY24, compared to 17% in FY23. This slowdown in wage growth suggests that companies are strategically optimizing costs to enhance profitability.
Steady Margins and Controlled Costs
Over the past four years, Indian corporations have maintained an average EBIDTA margin of 22%, while wage bills have grown annually at an average of 12%. This indicates a deliberate effort to align employee expenses with revenue growth, ensuring stable margins even in challenging market conditions.
The analysis revealed that employee expenses and the cost of goods sold (COGS)—the latter influenced by commodity price fluctuations—significantly impact EBIDTA. The weighted average negative contribution of employee expenses to EBIDTA growth improved, dropping to 7% in FY24 from 8.6% in FY23, underscoring better cost efficiency.
Q2 FY25 Trends
In the second quarter of FY25, listed companies reported a 7% growth in EBIDTA while the wage bill grew by a slower 5.6%. This demonstrates a continued commitment to maintaining profitability through disciplined cost management.
The SBI report highlights the strategic efforts of Indian corporations to balance revenue growth with profitability in a volatile economic environment. By moderating wage growth and controlling operational expenses, these companies are successfully sustaining their margins and ensuring financial resilience.
