Multinational companies in India see 45.2% profit surge in FY23: RBI report

The Foreign Direct Investment (FDI) companies in India reported a growth of 45.2% year-on-year (YoY) in their net profit to ₹2,69,000 crores in the fiscal ended March 2023 due to improved margins, said the RBI in a statement. The FDI or multinational (MNC) companies had earned a net profit of more than ₹1,85,000 crores in the financial year 2022.

As per the RBI data, the net profit margin of these companies soared to 5.9% in FY23 from 4.9% in FY22 and 3.2% in the fiscal 2020-21. The improvement came in the post-COVID recovery period for the 2,272 companies. The result is based on the audit of the annual accounts of these firms reported in the Indian Accounting Standards (Ind-AS) format. The performance analysis was done for a period of three years from 2021-2023.

Their dividend payout also saw a jump in 2023. It grew by 43.66% to ₹2,20,000 crores in 2023 from ₹1,45,000 crores in the preceding year.

The net sales of the companies also showed great upward movement in the post-pandemic recovery period. They witnessed robust improvement and consolidated further in the fiscal 2022-23.

Net profit growth & Dividend payout

The net sales of the sample companies surged by 21.1% apart from a 28.6% growth the year before, said the RBI report. Most of the companies were in manufacturing and service sectors that recorded above 10% sales growth, except those firms dealing in wholesale and retail trade.

The strong economic activity led to a 20.7% growth in raw materials expenses during the fiscal 2023. The operating expenses in 2023 also grew by 20.7% apart from the 31.3% growth in 2022. The manufacturing and service sectors also witnessed similar growth, the RBI mentioned.