Corporate India's revenue growth underperforms GDP expansion again

The combined revenues of BS1000 companies grew by 6.4 per cent in FY25 against 9.8 per cent growth in GDP at current prices

India’s corporate sector continues to lag the broader economy, with top listed firms posting revenue growth well below the expansion in nominal GDP for a second straight year. The combined revenue of BS1000 companies rose 6.4 per cent in 2024-25 (FY25), sharply trailing the 9.8 per cent growth in GDP at current prices. A year earlier, revenues grew just 5.2 per cent versus 12 per cent GDP growth.

 

The BS1000 is an annual listing of India’s 1,000 largest non-financial companies, ranked by total revenues, including other income. The FY25 ranking is preliminary and yet to be officially published.

 

In contrast, corporate revenues had surged ahead of GDP growth in the Covid-affected FY21 and FY22.

 

There is also a consistent decline in the corporate sector’s share of the economy. The BS1000 companies accounted for 40.3 per cent of India’s nominal GDP in FY25, down from 44.2 per cent in FY22 and 56.1 per cent in FY14. Still, that’s up from the 25-year low of 36.5 per cent in FY21. 

 

These companies had a combined market capitalisation of ₹325 trillion as of Monday, representing 72.3 per cent of the total value of all BSE-listed firms.

 

Though corporate profitability has also declined relative to GDP, it has proven more resilient than revenue. The BS1000 firms’ net profit was equivalent to 3.2 per cent of GDP in FY25.

 

The FY25 net profit-to-GDP remained  unchanged from FY24 and only slightly below the 3.3 per cent high recorded in FY22. The ratio was at a historic low of 1.2 per cent in FY20 and a peak of 5.6 per cent in FY08.

 

Total revenue of the BS1000 firms reached ₹133.1 trillion in FY25, up from ₹125.1 trillion in FY24. In contrast, nominal GDP expanded to ₹330.7 trillion from ₹301.2 trillion over the same period. 

 

The continued revenue underperformance among India’s leading listed firms, despite healthy GDP numbers, echoes patterns seen in the years before the Covid pandemic. Between FY14 and FY19, BS1000 revenue rose at a compound annual growth rate (CAGR) of just 4.6 per cent, less than half the 11 per cent CAGR of nominal GDP over the same period.

 

Over the longer FY14–FY25 period, nominal GDP clocked a CAGR of 10.3 per cent, while BS1000 revenue growth lagged at 7 per cent. Notably, most of the corporate gains came in the FY22–FY23 window, pushing the post-Covid (FY20–25) revenue CAGR to 11.7 per cent, more than double the 4.6 per cent CAGR logged during FY14–19.

 

Analysts attribute the widening divergence partly to a sluggish manufacturing sector and stronger gains in sectors like BFSI (banking, financial services and insurance) and agriculture. 

 

“Many of the large listed companies in oil & gas, metals, FMCG, and IT services are growing in low single digits, while BFSI and agriculture are expanding faster,” said Chokkalingam G, founder and CEO of Equinomics Research.

 

In FY25, the agriculture sector grew 10.4 per cent, while financial services, real estate, and professional services posted 10.2 per cent growth. Public administration and defence led all sectors with a 13.4 per cent jump, according to data from the National Statistical Office.

 

“The corporate performance and the official GDP estimates are discordant, and the buoyancy in headline economic growth is not visible in either revenue or employee compensation, or earnings growth,” says Dhananjay Sinha, co-head research and equity strategy Systematix Institutional Equity.