The Banking, Financial Services, and Insurance (BFSI), Oil & Gas, and Automobile industries are driving India’s corporate profit-to-GDP ratios to a 15-year high of 4.8% and 5.2%, respectively, in the financial year 2024 for the Nifty-500 Universe and listed businesses.
Overall, according to an analysis by Motilal Oswal Financial Services, all these industries accounted for 95% of the growth.
We could see the growth only in the BFSI sector, which was up 0.3% in comparison to the 0.3% and 0.2% gains in the oil and gas and automotive sectors.
Alternatively, the chemicals, tech, and metals sectors resulted in poor performance.
India’s nominal GDP growth of 9.6% has been surpassing the 30% year-over-year increase in business profit as seen in the Nifty-500 in 2024.
The ratio for Business profit-to-GDP drastically fell from 7.9% in the year 2008 to 1.9% in 2020.
Public Sector Undertakings (PSUs) also saw a rebound; from a low of 0.5% in 2020 to 1.8% in 2024, their profit-to-GDP ratio reversed the trend of value shifting from the public to the private sectors.
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