Multinationals Post 45.2% Growth in Net Profit in FY23: RBI Data
The Reserve Bank of India (RBI) has released data indicating a significant improvement in the financial performance of multinational companies (MNCs) operating in India. The net profit of these foreign direct investment (FDI) companies rose by a remarkable 45.2% year-on-year (YoY) to over Rs 2.69 trillion for the fiscal year ending March 2023 (FY23). This is a notable increase from the Rs 1.85 trillion net profit reported in FY22.
Key Highlights:
- Net Profit Growth:
- Net profit surged by 45.2% YoY, reaching Rs 2.69 trillion in FY23 from Rs 1.85 trillion in FY22.
- This significant growth is attributed to the post-pandemic recovery and an improvement in profit margins.
- Profit Margins:
- The net profit margin improved to 5.9% in FY23, up from 4.9% in FY22 and 3.2% in FY21.
- The increase in margins reflects the overall improvement in the business environment post-COVID-19 pandemic.
- Dividend Payouts:
- Dividend payments by these companies also saw a substantial rise, increasing by 43.66% to Rs 2.02 trillion in FY23 from Rs 1.45 trillion in FY22.
- The boost in dividend payouts indicates better profitability and shareholder returns.
- Sales Growth:
- The net sales of the sample companies increased by 21.1% in FY23, following a 28.6% growth in the previous fiscal year.
- Major manufacturing and services sectors, except for wholesale and retail trade, experienced double-digit sales growth for the second consecutive year.
- Operating Expenses:
- The strengthening of economic activities led to a 20.7% growth in raw material expenses in FY23.
- Operating expenses also rose by 20.7% on top of a 31.3% increase in the previous year, reflecting higher operational costs due to increased business activities.
- Economic Activity and Sectoral Performance:
- The recovery in economic activities post-pandemic was consolidated further during FY23.
- Both the manufacturing and services sectors showed robust performance, contributing to the overall growth in net sales and profitability.
Analysis Based on Audited Accounts:
The performance analysis by the RBI is based on the audited annual accounts of 2,272 companies that reported in the Indian Accounting Standards (Ind-AS) format for three accounting years from FY21 to FY23. The data underscores the resilience and recovery of MNCs in India, highlighting their ability to adapt and grow in the post-pandemic economic landscape.
Conclusion:
The impressive growth in net profit and improved profit margins for MNCs in India reflect a positive post-pandemic recovery. With substantial increases in dividend payouts and strong sales growth, these companies are showing a robust performance. The data provided by the RBI highlights the significant contributions of FDI companies to the Indian economy, underscoring their importance in the country’s economic growth and stability.
