India Inc. corporate profit-to-GDP ratio hits 17-year high

India Inc. has hit a major profitability milestone. In FY25, the corporate profit-to-GDP ratio for the Nifty-500 universe stood at 4.7%, matching a 17-year high—a level not seen since the pre-global financial crisis era. For all listed companies, the ratio was even higher at 5.1%, the best in 14 years, signalling robust earnings strength despite global macro uncertainties, according to report by Motilal Oswal.

The turnaround has been aided by a shift in the sectoral profit mix. Telecom, long a drag on aggregate profits, swung from being a negative contributor for seven consecutive years to a positive one in FY25. Public sector banks, healthcare, consumer, metals, and infrastructure also chipped in with incremental gains, collectively lifting the ratio. Meanwhile, sectors such as oil & gas, automobiles, cement, utilities, private banks, and retail saw a marginal decline in their contribution.

BFSI led the pack, contributing 1.84% to GDP, followed by oil & gas (0.51%), technology (0.40%), metals (0.34%), and automobiles (0.32%). Together, these five sectors accounted for 71% of the total corporate profit-to-GDP ratio. At the other end of the spectrum, e-commerce remained the only sector with a net negative contribution to the ratio.

Interestingly, the uptick wasn’t driven by India’s largest companies alone. While large-caps saw a marginal dip—from a 16-year high of 3.55% in FY24 to 3.51% in FY25—the baton was picked up by the mid- and small-cap segments. Their contribution to GDP rose to 0.81% and 0.42%, respectively, up from 0.75% and 0.41% last year. This dispersion suggests that the earnings recovery is broadening beyond the blue-chip names.

Looking ahead, the momentum appears sustainable. Nifty earnings are forecast to grow by 12% in FY26 and 15% in FY27, outpacing the projected nominal GDP growth of 10.8% for FY26. If this trend holds, the corporate profit-to-GDP ratio could climb even higher, reinforcing the structural strength of India’s corporate sector.

From crisis-era lows a decade ago to a post-pandemic profit surge, it seems India Inc has more than recovered—it is thriving.