Indian Corporates Rebound: Q3FY25 Marks Turnaround in Growth

Indian companies have rebounded in Q3FY25 after two quarters of negative EBITDA growth, says SBI. Revenue, EBITDA, and PAT reported notable increases, reflecting stronger operational performance. Consumer sentiment and decreased inflation expectations fuel demand-led growth, suggesting a sustainable economic upturn.

In a marked reversal of fortunes, Indian companies have shown a solid recovery in the third quarter of the financial year 2025, according to a report by the State Bank of India (SBI). The report underscores a positive trend in earnings before interest, tax, depreciation, and amortization (EBITDA), highlighting improved margins across various sectors.

The data reveals that approximately 4,000 publicly listed companies experienced a revenue growth of 6.2 percent in Q3FY25 compared to the same period last year. More significantly, EBITDA and profit after tax (PAT) increased by around 11 percent and 12 percent respectively, indicating stronger operational performance.

Excluding the banking, financial services, and insurance sectors, revenue growth was recorded at 5 percent while PAT saw a 9 percent rise. This broad-based recovery suggests a promising turnaround in EBITDA growth, with companies that experienced negative growth in the previous quarters now reporting a 5 percent increase.

Aggregate EBITDA margin improved by 44 basis points, reaching 14.84 percent in Q3FY25 from 14.4 percent in the preceding quarter. Corporate gross value added (GVA) also noted an improvement, rising by 300 basis points year-on-year to 9.55 percent. The report attributes the resurgence in corporate earnings to improved consumer sentiments, alongside a slowdown in household inflation expectations, fostering higher discretionary spending and demand-led growth.

Stabilizing consumer confidence, previously a concern, and increased optimism about global economic trends and long-term growth prospects are expected to bolster sustainable economic expansion. The positive earnings trajectory in Q3FY25 places Indian companies in a favorable position for continued growth in upcoming quarters.