<p>New Delhi: India Inc has maintained robust growth in profits consistently in recent years by keeping a curb on wage bills, an analysis of the balance sheets of around 4,000 listed companies by SBI Research shows.</p>.<p>Profit after tax of around 4,000 listed companies surged by 31.7 per cent during the financial year 2023-24, while employee expenses of these companies increased by just 13 per cent. </p>.<p>“Deep dive into the expenditure side of the Indian Inc. through the weighted average contribution model suggests apart from Cost of Goods sold (COGS), which showed higher variations due to volatility in commodity prices, modulation in employee expenses contribute sizable weight in deciding earnings,” SBI Research said in a note. </p>.<p>In the last four years India Inc. maintained an average EBIDTA margin of 22 per cent, while average wage bill grew by just around 12 per cent.</p>.<p>Even during the Covid pandemic year, despite a slowdown in sales, profits of companies surged. During the financial year 2020-21, which was the worst affected by the Covid pandemic, net sales of around 4,000 listed companies declined by 3.3 per cent, but profit after tax soared by 112.2 per cent.</p>.<p>Despite more than doubling in the profits companies increased their employee expenses by just 4.6 per cent. This clearly shows that companies increased their profits by modulating wage bills.</p>.India Inc raises record Rs 1.21 lakh crore via QIPs till Nov in 2024.<p>Low increase in wages has started impacting consumption and overall economic growth. India’s GDP growth slipped to a seven-quarter low of 5.4 per cent in July-September 2024 period dragged by poor performance of the manufacturing sector. Sluggish urban consumption was among the key reasons for the dip in economic growth during the quarter.</p>.<p>Chief Economic Advisor V Anantha Nageswaran recently said that slow increase in wages have affected consumption and manufacturing activities. Wages have either declined or remained stagnant despite a huge surge in profits of companies in recent years.</p>.<p>In the last six years, average wages of urban male increased only marginally from Rs 13,426 in 2017-18 to Rs 13,834 in 2023-24, while for female workers it dropped from Rs 10,867 in 2017-18 to Rs 10,693 in 2023-24, as per the annual Periodic Labour Force Survey (PLFS) data.</p>.<p>The condition of workers in rural areas is even worse. The average monthly earnings or wages of workers in rural India declined to Rs 8,842 in 2023-24, which is lower than Rs 9,107 recorded in 2017-18.</p>
<p>New Delhi: India Inc has maintained robust growth in profits consistently in recent years by keeping a curb on wage bills, an analysis of the balance sheets of around 4,000 listed companies by SBI Research shows.</p>.<p>Profit after tax of around 4,000 listed companies surged by 31.7 per cent during the financial year 2023-24, while employee expenses of these companies increased by just 13 per cent. </p>.<p>“Deep dive into the expenditure side of the Indian Inc. through the weighted average contribution model suggests apart from Cost of Goods sold (COGS), which showed higher variations due to volatility in commodity prices, modulation in employee expenses contribute sizable weight in deciding earnings,” SBI Research said in a note. </p>.<p>In the last four years India Inc. maintained an average EBIDTA margin of 22 per cent, while average wage bill grew by just around 12 per cent.</p>.<p>Even during the Covid pandemic year, despite a slowdown in sales, profits of companies surged. During the financial year 2020-21, which was the worst affected by the Covid pandemic, net sales of around 4,000 listed companies declined by 3.3 per cent, but profit after tax soared by 112.2 per cent.</p>.<p>Despite more than doubling in the profits companies increased their employee expenses by just 4.6 per cent. This clearly shows that companies increased their profits by modulating wage bills.</p>.India Inc raises record Rs 1.21 lakh crore via QIPs till Nov in 2024.<p>Low increase in wages has started impacting consumption and overall economic growth. India’s GDP growth slipped to a seven-quarter low of 5.4 per cent in July-September 2024 period dragged by poor performance of the manufacturing sector. Sluggish urban consumption was among the key reasons for the dip in economic growth during the quarter.</p>.<p>Chief Economic Advisor V Anantha Nageswaran recently said that slow increase in wages have affected consumption and manufacturing activities. Wages have either declined or remained stagnant despite a huge surge in profits of companies in recent years.</p>.<p>In the last six years, average wages of urban male increased only marginally from Rs 13,426 in 2017-18 to Rs 13,834 in 2023-24, while for female workers it dropped from Rs 10,867 in 2017-18 to Rs 10,693 in 2023-24, as per the annual Periodic Labour Force Survey (PLFS) data.</p>.<p>The condition of workers in rural areas is even worse. The average monthly earnings or wages of workers in rural India declined to Rs 8,842 in 2023-24, which is lower than Rs 9,107 recorded in 2017-18.</p>