Input Cost Pressure
Operating profit growth of manufacturing cos halved in FY25 on higher input costs, says RBI
This story was originally published at 18:05 IST on 26 June 2025
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NEW DELHI – The growth in operating profit of manufacturing companies in the country moderated to 6.0% in 2024-25 (Apr-Mar) from 12.4% in FY24 due to an increase in input costs, according to a study of listed non-financial private companies by the Reserve Bank of India. The expenses of these companies for raw materials increased 6.6% in FY25, pointing to input cost pressure, the central bank said Thursday.
The operating profit margin of these companies fell 20 basis points on year to 14.2% in FY25, according to the study based on the financial results of 3,902 companies. The raw material-to-sales ratio of manufacturing companies increased to 55.7% in FY25 from 54.2% in FY24.
Sales of manufacturing companies grew 6.0% in FY25, higher than the 3.5% registered in FY24. The growth was led by the automobile, electrical machinery, food and beverages, and pharmaceutical industries, it said. The sales of the petroleum and steel industries contracted in FY25.
Sales growth of listed private non-financial companies as a whole increased 7.2% in FY25, up from 4.7% a year ago. Within this, the sales growth of information technology companies improved to 7.1% from 5.5% in FY24. Sales of non-IT services companies grew in double digits in FY25, led by the healthy performance of telecommunication, transport and storage services, and wholesale and retail trade industries.
The staff costs of manufacturing, technology, and non-IT services companies grew by 10.0%, 4.4%, and 12%, respectively, in FY25. "Staff cost to sales ratio broadly remained stable for manufacturing companies while it moderated for services companies," the RBI said.
The operating profit of IT companies grew 6.1% in FY25, while that of non-IT services companies moderated to 15.9%. The operating profit margin of these two sectors moderated by 80 bps to 21.9% and 30 bps to 22.1%, respectively. End
Reported by Anand JC
Edited by Saji George Titus
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