The non-government non-financial (NGNF) private limited companies’ profit after tax registered a double-digit growth of 31.6 per cent year-on-year (YoY) in FY25, as compared to 51.9 per cent in FY24, according to the latest data by the Reserve Bank of India.
“Despite the rise in costs, operating profit and profit after tax continued to register double-digit growth, building on a strong base in the previous year. Profitability indicators improved, with both net profit margin and return on equity rising during the year, largely supported by the services sector,” the RBI said.
The data is based on audited annual accounts of 15,919 companies. The sample companies accounted for 40.3 per cent of the total paid-up capital (PUC) of NGNF private limited firms, with aggregate PUC at Rs 8.44 trillion as of end-March 2025.
Net sales of these companies grew 11.4 per cent in 2024–25, marginally lower than the 11.7 per cent growth recorded in the previous year. The services sector outperformed, posting a 13.5 per cent increase in sales, led by wholesale and retail trade, real estate, and transport and storage services.
In comparison, sales growth in the manufacturing sector moderated slightly to 9.2 per cent from 9.4 per cent a year ago. Key efficiency indicators also weakened, with the ratios of net sales to both gross fixed assets and total net assets declining during the year.
Operating expenses rose 10.6 per cent YoY during FY25, against 9.9 per cent in FY24. Higher expenses were due to higher manufacturing expenses and employee remuneration. While employee costs rose in the services sector, they showed moderation in manufacturing companies.
Leverage levels declined across the sample, with the debt-to-equity ratio easing at the aggregate level as well as across major sectors. The interest coverage ratio improved to 3.2 in 2024–25 from 3.0 a year earlier, indicating stronger debt-servicing capacity. Sectorally, the services segment saw an improvement in interest coverage, while manufacturing recorded a marginal dip.
The share of external sources in total funding increased to 53.6 per cent in 2024–25 from 52.3 per cent in the previous year, largely on account of higher current liabilities. Gross capital formation, comprising investment in fixed assets and inventories, rose to 48.2 per cent of total fund usage from 45.3 per cent a year ago, indicating improved investment activity. At the same time, allocation towards current assets also increased during the year.
The data suggests that while cost pressures persisted, non-government and non-finance private companies maintained growth momentum and strengthened their balance sheets in FY25, supported by robust performance in the services sector.