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By most estimates, the latest earnings season was lukewarm, at best. While many companies beat street estimates, there were notable misses as well. The adjusted net profit of the top 50 companies grew 4.8% compared to a year earlier between January and March 2025.
However, we decided to dig deeper to show areas where the profitability seems to have turned around faster than the rest. A CNBC-TV18 analysis using data from the Ace Equity database showed 10 out of 18 sectors that make up the BSE500 index saw expansion in EBITDA margin in the fourth quarter of the financial year ended March 2025.
EBITDA, which stands for earnings before interest, tax, depreciation, and amortisation, is a measure of the operating performance. Sectors such as chemicals, healthcare, banks, and consumer durables posted the highest margin improvements, while realty, capital goods, FMCG, and retail saw their margins shrink.
Top sectors by margin expansion between Jan-March 2025
| Sector | EBITDA Margin | Change (YoY) |
| Telecom | 51.3% | 336.4 bps |
| Chemicals | 15.7% | 147.3 bps |
| Healthcare | 24.7% | 106.3 bps |
| Consumer Durables | 8.7% | 94.2 bps |
Source: Ace Equity, 100 basis points (bps) make a percent
The BSE500 index, which represents around 93% of the total market capitalisation of companies listed on BSE, spans 20 major sectors of the Indian economy — making it a comprehensive barometer of corporate performance.
Notably, chemicals, consumer durables, power, and construction materials witnessed margin expansion both on a year-on-year and sequential basis.
The chemicals sector, for example, saw operating margins expand by 147 basis points (bps) to 15.7%. Healthcare and Telecom also recorded significant gains, with margins rising by 100 bps and 300 bps, respectively.
On the company level, UPL Ltd reported strong operational performance in Q4, supported by a favorable product mix, reduced discounts, and improved absorption of fixed costs. With quarterly revenue exceeding ₹15,500 crore, UPL contributed over a quarter of the chemical sector’s total revenue during the three months ended March 2025.
In telecom, the sector-wide EBITDA margin surged by 336 bps to 51.3%, although it declined 283 bps sequentially.
In contrast, sectors like IT, Retailing, and Realty saw margin contraction on both a yearly and sequential basis, reflecting ongoing challenges in demand and cost pressures.
Sectors that saw the sharpest contraction in margin between Jan and March 2025
| Sector | EBITDA Margin | Change (YoY) |
| Realty | 26.6% | -535.5 bps |
| Gas Transmission | 19.5% | -216.5 bps |
| Capital Goods | 19.9% | -184.5 bps |
| FMCG | 19.8% | -68.5 bps |
Source: Ace Equity
For a sample of 203 companies from the BSE500 index (excluding banks and financials), the average operating margin rose to 16.1% in March 2025, compared to 15.5% a year earlier. Aggregate net profit for the group grew 12.8% year-on-year to ₹1.8 lakh crore, while revenues increased at a modest 5.2% to ₹20.9 lakh crore.
Conversely, FMCG, capital goods, and real estate saw margin contraction of up to 500 bps. Analysts attributed the pressure in FMCG to muted volumes driven by weak rural demand.
According to Varun Goel, Senior Fund Manager – Equity at Mirae Asset Investment Managers (India), a long-anticipated cyclical recovery in India is now underway. He expects FY26 to be a turning point, forecasting earnings growth of 20–25% by FY27. “We believe some of the most pronounced gains will come from sectors like real estate, which stand to benefit from likely rate cuts in the coming quarters,” Goel noted.
