India Inc’s operating profit margin will remain constant at 15-18%. Q1FY25: Report, ET Retail

New Delhi: India Inc.’s operating profit margin is expected to improve. will remain steady at 15-18 per cent in the first quarter (April-June period) of the current financial year (FY25), a report showed on Monday. According to ICRA, the global economic scenario and the onset and intensity of monsoons in India will remain key issues to monitor in the near term.

“The 5% year-on-year and 6.3% sequential growth in Indian corporate revenues in the fourth quarter of FY2024 was supported by healthy demand from consumer-facing sectors such as airlines, hotels, automotive and FMCG,” said Kinjal Shah, Senior Vice President and Associate Group Head-Corporate Ratings, ICRA Limited.

Strong growth was also recorded in the energy and construction sectors.

Meanwhile, revenue growth was limited to some extent by a decline in execution levels in the face of falling input costs (mainly raw materials), mainly in sectors such as fertilizers and chemicals, which also faced a slowdown in demand due to depletion of inventories in distribution channels, Shah noted .

According to the report, growth is likely to slow slightly in the first quarter of FY2025 (on a quarterly basis), at a relatively high level, due to a perceived temporary interruption in infrastructure activities for most of the first quarter of FY2025 due to the general elections and demand dependence in areas rural areas from the monsoon.

In the fourth quarter of the fiscal year, 24 sectors such as automotive, energy, pharmaceuticals and metals & mining recorded year-on-year improvement in operating profit margin (OPM) due to gradual price increases and easing of production costs.