Q4 Earnings Watch: India's profit -hungry companies are at the expense of employees

Copyright © HT Digital Streams Limit all rights reserved. Companies Manjul Paul 2 min Read April 30, 2025, 05:20 IST Mint’s analysis shows an emerging pattern of companies that prioritize profitable spending on the workforce. Summary Mint’s latest earnings analysis indicates a minor increase in the share of companies that reported a sharper profit growth than employees. But it also shows that some companies have managed to prioritize employee benefits above profits. In the midst of geopolitical uncertainty and market volatility, Indian businesses have managed to keep their profits in the March quarter (Q4FY25). However, a detailed analysis of the profitable enterprises shows that much of the profitability involved a reduced wage bill, as businesses have aggressively protected their bottom lines. An analysis of BSE-listed companies, based on independent data obtained from capital, reveals that the net profit growth in the March quarter emphasized the net profit growth in the growth of employees in the March quarter, which emphasizes a pleasant trend. About 71% of these profitable enterprises reported the net profit growth that exceeded their wage costs in the fourth quarter, from 69% in the October-December period, according to the analysis of Mint. This indicates a emerging pattern to prioritize profits above issues to the workforce. A rolling sample of 107 profitable enterprises was analyzed for the March quarter, compared to 128 in the previous quarter. The impact of slowing down Mint’s analysis of Q4 data reinforces a similar pattern found in the third quarter review, which revealed that the total net profit for 3.577 listed companies increased despite three consecutive quarters of slow turnover. This diversity between revenue performance and profit growth raises critical questions about the sustainability of the businesses of the businesses. A common sample of 270 listed companies also shows a clear slowdown in growth figures. On average, the net profit grew just 8.4% year-on-year in the March quarter, which dropped sharply from 15.7% growth in the December quarter. Employee expenses delayed 5.8% in the March quarter in the March quarter and 7.8% in the December quarter. Read also | Q4 earnings direct tracker: The latest on how India Inc’s largest companies performed within these businesses, 84 reported the net profit in the fourth quarter, of 75 in the previous three months. 57 of these 84 struggling businesses increased their employee expenses in the fourth quarter, while 62 of the 75 did so in the third quarter. Seven companies have recorded steeper wage contractions as their corresponding profit drops, compared to just two in the previous quarter, underlining the rise in companies that prioritize the profits in the current volatile environment. Read also | What the IT Companies’ Q4 shows means to investors Reliance Industrial Infrastructure Ltd is one example of a business where wage cost cuts have exceeded the bargain contractions. As Indian enterprises still navigate economic conditions, this pattern of margin protection through cost -saving measures in the absence of a significant income growth may indicate deeper structural challenges in maintaining both profitability and employees’ compensation. This is the fourth part of a series of data stories about the ongoing earnings season. Read the first, second and third part here. Catch all the corporate news and updates on live currency. Download the Mint News app to get daily market updates and live business news. More Topics #Q4 Earnings Coin Specials