The bottom line of India Inc has surged nearly 3 times faster than GDP since FY20, all thanks to GST-led formalisation and lower debt burden cost, according to Ionic Wealth Chartbook by Angel One. Data showed that corporate profit as % of GDP has climbed to 6.9% in FY25 from 1.9% in FY20. The report further said that it still has headroom for growth. For US, the corporate profit as percentage of GDP stood at 16% in 2024.

“International capital, technology and manufacturing scale are the next critical step to lift corporate profits,” Ionic Wealth said.

The report also said that post-Covid, the Nifty 500 earnings mix has reshaped—BFSI’s share has doubled to nearly 39% in FY25 from 20.2% in FY20. Automobiles have inched higher to 6.8% from 4.1% during the same period. On the other hand, technology (8.5% from 17.9%), oil & gas (10.7% from 15.7%) and chemicals & pharmaceuticals (5.7% from 10.6%) have seen their shares shrink. Metals and utilities remain broadly unchanged at around 7% and 5%, respectively.

Sharing its views on the banking and IT sectors, Ionic Wealth said that loan growth slows as high CD ratios and unsecured-loan stress curb risk appetite. Margin pressure should ease in the second half of FY26 (H2FY26) once rate cuts arrive and corporate demand revives. Softer funding costs by H2FY26 should steady spreads for HFCs/NBFCs. On the other hand, macros keep discretionary budgets on hold in the case of the IT sector.

For the year ended March 2025, revenue of the Nifty 500 grew by 7% because of demand slowdown, as per Ionic Wealth. “Bottom line grew faster owing to operating leverage and margin expansion. In segmental, midcaps and smallcaps have outpaced largecaps,” the report said, adding private banks, NBFCs, capital goods, consumer durables and healthcare posted double-digit revenue and EBITDA growth outpacing benchmark’s single digit Nifty 500 growth.

Across most sectors, mid-cap (up 22% YoY) and small-cap (up 17% YoY) companies delivered faster PAT growth than their large-cap (up 3%) peers, spotlighting where the next wave of earnings momentum lies.

While sitting on a five-year high Rs 10.67 lakhs crore cash balance, corporates plan to double capital spending to Rs 72.25 lakh crore during FY26-30. Majority of this capex will be funded through operating cash flows, the report said. It further said that India Inc’s capex quality is rising – about 80% of private players’ spending is focus on income generation and upgradation and nearly 29% of their outlays is now being done for value addition.

A look at top 10 companies with highest capex growth in FY25 showed that majority of these players operate in infrastructure as well emerging industries like railways, defence, steel pipes and shipping.

Commenting on the health of India Inc, Srikanth Subramanian, Co-Founder & CEO, Ionic Wealth said, “Robust balance sheets and strong cash flows, coupled with easing inflation and resilient demand amid geopolitical uncertainties, underscore India Inc’s FY25 strength. We anticipate robust FY26 growth, propelled by a rebound in government capex, strong rural consumption, and the China+1 theme.”