Why did India Inc's September quarter profits surge so significantly?

Profits surged due to a nearly 50% increase in non-core income and strong performance from small and mid-cap companies, rather than broad demand growth.

Are India Inc's profit margins at risk of declining?

Yes, margin pressure is emerging in industrials and consumption sectors, suggesting that overall profit margins may have peaked in the September quarter.

What is the outlook for Indian corporate demand and profitability?

While festive demand is anticipated, a broad-based rebound is missing, and profitability will likely depend on stronger demand without significant sales volume increases.

Home / Business and Economy / India Inc's Profit Surge: Not What It Seems

India Inc's Profit Surge: Not What It Seems

21 Nov, 2025

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Summary

Profit growth driven by non-core income, not broad demand.
Small and mid-cap companies significantly outperformed larger ones.
Margin pressure emerged in key sectors despite overall profit gains.

India Inc's Profit Surge: Not What It Seems

India Inc.'s September quarter results revealed a significant jump in net profit, the strongest in nine quarters, yet this performance was not fueled by a broad-based demand upturn. Instead, a substantial 50% increase in non-core income and robust contributions from small and mid-cap companies masked modest operational revenue growth of 6.5%. While some sectors like cement and automobiles exhibited margin expansion, emerging pressures in industrials and consumption suggest that profit margins may have peaked.

The analysis highlighted that oil marketing companies and banks, when excluded, offer a clearer picture of underlying performance. Even without these giants, net profit surged 45%, driven again by a doubling of non-core income. Stronger volume growth in sectors like telecom and automotive, alongside resilient mid- and small-caps, underpinned this profit boost, indicating a selective recovery rather than a widespread rebound.