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Corporate profits in India reached a significant milestone in FY25, with the profit-to-GDP ratio for the Nifty-500 companies standing at 4.7 per cent, marking a 17-year high, according to a report by Motilal Oswal.

For the listed Indian companies, this ratio was even higher at 5.1 per cent, a 14-year high. It said, "In 2025, the corporate profit-to-GDP ratio for the Nifty-500 Universe remained at 4.7 per cent, marking a 17-year high".

The report stated that the sustained rise in the profit-to-GDP ratio was supported by strong performance in several key sectors. Telecom, which had been a negative contributor for the past seven years, turned positive in FY25. Other sectors contributing to the rise included PSU Banks (which added 0.07 per cent to the ratio), Healthcare (0.04 per cent), Consumer (0.04 per cent), Metals (0.03 per cent), and Infrastructure (0.2 per cent).

However, some sectors saw a drop in their share of the profit-to-GDP ratio. Oil & Gas saw the biggest decline of 0.28 per cent, followed by Automobiles (0.03 per cent), Cement (0.02 per cent), Utilities (0.02 per cent), Private Banks (0.01 per cent), and Retail (0.01 per cent).
Despite a challenging environment, corporate profits for the Nifty-500 companies grew by 10.5 per cent year-on-year in FY25. This double-digit growth is notable as it comes on a high base of 30.5 per cent in FY24 and represents a strong 30.3 per cent CAGR over the past five years.

It said, "The corporate profits for the Nifty-500 universe experienced double-digit growth, rising 10.5 per cent YoY in FY25". The report highlighted that this performance was achieved during a year marked by weak consumption, a slowdown in government spending during the first half due to elections, and volatile exports amid global uncertainties.

For the overall listed universe, India's corporate profit-to-GDP ratio rose slightly from 5.0 per cent in FY24 to 5.1 per cent in FY25. When including both listed and unlisted companies, the ratio had already seen a sharp jump to 7.3 per cent in FY24 from 6.3 per cent in FY23, mainly due to the spike in profits of listed firms.

The report also analysed corporate profits based on ownership. Among private companies within the Nifty-500, the profit-to-GDP ratio reached an all-time high of 2.8 per cent in FY25, up from 2.6 per cent in FY24.

For PSUs, the ratio declined slightly to 1.6 per cent from 1.8 per cent a year ago. Meanwhile, MNCs recorded their highest-ever ratio of 0.31 per cent in FY25, up from 0.29 per cent in FY24.