As 2025 rolls in, India Inc will continue to face global tariff tensions and slow down the demand curve. Still, the robust financials of substantial cash reserve would place it on the front lines of such headwinds.
According to data from ACE Equities, as of September 30, 2024, cash reserves of BSE 500 companies (excluding BFSI and oil & gas) had reached ₹7.68 lakh crore, a jump of 51% from ₹5.06 lakh crore at the end of FY20.
Experts comment on India Inc’s growth
Analysts attribute growth factors such as buoyant stock markets, fundraising through IPOs and QIPs, and disciplinary operational activities. Bhavesh Shah, Managing Director at Equirus, has underlined that it is due to the pandemic that companies have started focusing more on liquidity, resulting in healthier balance sheets.
The post-pandemic boom in consumer demand, along with digitization, also supported corporate earnings. Efficiency improvements and regulatory reforms, including the Insolvency Code, further streamlined operations. “Debt repayment became a key objective for IPO funds, and markets rewarded companies with minimal leverage,” Shah explained.
Ind Inc improves in 2025, over 51% improvement since COVID
Post-pandemic super-earning cycles in export-led sectors such as IT and pharmaceuticals, coupled with shorter capex cycles in renewables and 5G infrastructure, have also helped improve returns. By March 2024, the debt-to-EBITDA ratio of BSE 500 companies had improved to 2.5x-2.7x from 4.5x pre-Covid, thus indicating a much stronger financial position.
Going forward, India Inc is expected to use its cash balance wisely. Inorganic growth in the form of M&A will play a major role. Acquisitions are gaining more importance than greenfield projects in solar, cloud computing, and pharma.
Santosh Pandey of Nuvama noted that companies with robust financials will act as consolidators, acquiring smaller players to strengthen market positions. Meanwhile, investment in emerging areas like education, renewables, and transport is anticipated to grow.
Analysts believe that despite the slowdown in organic growth in some sectors, demand is not permanently slowing down. Strong cash reserves and reduced leverage have equipped India Inc to ride out 2025 with confidence, focusing on growth opportunities through strategic investments.