Revenue Growth and Profit Margins Across Selected Indian Sectors

Six Companies, Six Stories

Sector comparisons often stop at revenue growth. This case study looks at one large company from each of six sectors over the five years from FY21 to FY26, and compares revenue growth, operating profit growth and margins.

The companies are TCS (IT services), Hindustan Unilever (consumer goods), Maruti Suzuki (cars), UltraTech Cement (cement), Asian Paints (paints) and Sun Pharmaceutical (pharma).

The Numbers

Source: consolidated figures from company annual reports, as compiled by Screener. Growth rates are compound annual rates over five years.

Finding 1: Fast Revenue Growth Did Not Mean Fast Profit Growth

UltraTech grew revenue faster than any company except Maruti, at almost 15% a year, helped by new capacity and acquisitions. But its operating profit grew only 8% a year, because its margin fell from 26% to 19%. Energy and fuel costs, which spiked in FY23, and the integration of acquired plants weighed on margins.

Asian Paints shows the same pattern on a smaller scale: about 10% revenue growth, under 7% operating profit growth.

Finding 2: Margins Did the Work for Two Companies

Maruti and Sun Pharma grew operating profit faster than revenue. For Sun Pharma, the margin rose from 25% to 28%, helped by a growing share of higher-margin specialty products. For Maruti, the margin rose from 8% to 12%.

Finding 3: The Base Year Matters

Maruti's numbers need care. FY21 was hit hard by the pandemic lockdown, and FY22 by a global chip shortage, so the starting point was unusually low. A 31.8% annual growth in operating profit says more about recovery from a weak base than about the business's normal trend. Measured from a normal year, growth would look much lower.

This is a general lesson: always check whether a growth rate starts from a depressed year.

Finding 4: Steady Margins, Slower Growth

TCS and Hindustan Unilever kept their margins within a narrow range. TCS grew revenue about 10% a year; HUL about 6.5%, the slowest in the sample. Stable margins make profits predictable, but they also mean profit growth cannot run ahead of revenue growth. For these businesses, revenue growth is the main lever.

Finding 5: One-Offs Distort Net Profit

HUL's FY26 net profit of ₹15,059 crore was well above its operating trend because of a large one-off item, while Sun Pharma's FY21 net profit was held down by exceptional charges. Using net profit would make HUL's growth look far better and Sun Pharma's far better still than the businesses deserved. Operating profit gives a cleaner picture.

Reading the Table as an Investor

A table like this is a starting point for questions, not a ranking. The useful questions are about direction and cause. Is a falling margin temporary, like a fuel cost spike, or structural, like new competition? Is fast revenue growth organic, or bought through acquisitions that need more capital? Is a high profit growth rate a recovery from a bad year, or a new trend?

The same questions apply to any sector comparison. Two companies with the same five-year revenue growth can be in very different positions depending on what happened to their margins and why.

Limits of This Study

• One company per sector is not a sector average. Smaller companies in the same sectors may look very different.
• Acquisitions add to growth for some companies, especially UltraTech.
• Five years includes the pandemic, which distorts the start of the period.

Habits for Comparing Growth Across Sectors

1. Compare revenue growth with operating profit growth, not revenue alone.
2. Track margins at the start and end of the period.
3. Check the base year for unusual events.
4. Separate organic growth from acquisitions where disclosed.
5. Use operating profit when net profit has large one-off items.

The Reframe

Revenue growth tells you how fast a business got bigger. Margins tell you how much of that growth reached its owners. Over these five years, the two often pointed in different directions.