India Inc's profit declines sharply to 3.48% of GDP in Q2 of FY23

Ratio for manufacturing firms at 9-quarter low of 0.93%

The corporate profit to gross domestic product (GDP) ratio declined sharply in the previous two quarters, reversing the steep rise seen in the second half of financial year 2020-21 (FY21) and FY22.

The combined net profit of the 3,361 listed companies in Business Standard’s sample was equivalent to 3.48 per cent of India’s GDP at current prices in the September quarter (Q2FY23), down from 3.57 per cent in Q1, and 4.39 per cent in Q2FY22, which was a decadal high. The Q2 figure was, however, higher than the pre-Covid average of 2.3 per cent.

The decline in the ratio was led by