The operating margin of Indian companies can be between 15 to 18 percent in the first quarter of the current financial year (FY2025). This information was given in a report on Monday. According to the news of IANS, the ICRA report said that in the coming time, economic activities at the global level, the movement of monsoon in India will be big factors, which will have to be monitored.
Demand remained good in these sectors
According to the news, ICRA Senior Vice President and Co-Group Head – Corporate Ratings, Kinjal Shah said that due to good demand in FMCG, automotive, hotels and airlines, the income of companies in the fourth quarter of FY24 has increased by 5 percent on an annual basis and 6.3 percent on a sequential basis. Growth is strong in the power and construction sectors. Shah further said that the income has declined due to the reduction in the cost of raw materials and slowdown in demand in the fertilizer and chemical sector.
Margins in Q1 FY25
According to the report, due to the closure of infrastructure activities due to the Lok Sabha elections and a higher base, margins may see a slight decline (on a quarterly basis) in the first quarter of FY25. In the fourth quarter of FY24, operating margins increased on a year-on-year basis from the auto, power, pharma, metal and mining sectors due to cost reduction and price hikes.
what is operating margin
Operating margin is the ratio of a company’s or business line’s operational profit to revenue. Expressed as a percentage, operating margin shows how much revenue is generated from operations from each dollar in sales after taking into account the direct costs involved in earning those revenues.
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