Page 25 - CII ARTHA

OCTOBER 2025

11.4 per cent in Q3FY25. A substantial increase in 'other Over the last five quarters, the annual growth rate of total
income and extraordinary income', which includes items expenses has been on a moderating trend, falling sharply to
such as interest income, rental income, and gains on asset 2.7 per cent in Q1FY26 from 5.6 per cent in the previous
sales, has also contributed to a sharp rise in the bottom quarter. On a sequential basis, total expenses in Q1FY26
line of firms. contracted by 6.1 per cent over the last quarter.

Profit after tax of non-financial firms Share of Key Expense Items in Total Expenses, %
(ex oil & gas) have witnessed three (Average of Last 4 Quarters)
consecutive quarters of double-digit
growth
Others
23%
Mirroring the improvement in net profit, PAT margin (the Material
ratio of profit after tax to net sales) has also demonstrated Inputs
sequential growth for four consecutive quarters, increasing 59% Power & Fuel
2%
by more than 160 basis points over this period. In addition Interest Expense
to higher profitability, this improvement in PAT margins has 3%
been driven by a sharp deceleration in total expenses. Depreciation
4%
Salary & Wages
9%
Sharp fall in input cost, especially of
material inputs, has helped companies
improve their profit margin Note: Others include items such as tax provision, regulatory charges, rent,
royalty, advertising, travel, extraordinary expenses, etc.

Growth Rate of Major Expense Items (y-o-y%)

12.0

8.6 9.0
8.0 7.7
6.2 6.7 6.1
5.2

4.0 3.8
2.7

0.4
_

-4.0
-4.6
-5.6

-8.0 Total Expense Material Inputs Salaries & Wages Depreciation Interest Expense Power & Fuel

Q1FY25 Q2FY25 Q3FY25 Q4FY25 Q1FY26

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