Microsoft India’s FY23 Profit Jumps 30%, Revenue Rises To INR 19,229 Cr

US tech giant Microsoft’s India entity Microsoft Corporation India Private Limited’s operating revenue surged 39% in the year ended March 31, 2023. Operating revenue stood at INR 19,229.4 Cr in the financial year 2022-23 (FY23), a 1.2X increase from INR 13,819.5 Cr in FY22. 

Microsoft India earned a majority of its revenue from services. In FY23, it earned INR 13,103 Cr from sale of services, a 46% increase from INR 8,951.3 Cr in the previous fiscal year. Service revenue mostly comprises subscription revenue earned from Microsoft 365, Microsoft Azure, Xbox 360, LinkedIn, among others. 

Meanwhile, it earned INR 4,508.3 Cr from sale of products in FY23, a 28% increase from INR 3,518.9 Cr in FY22. Microsoft’s product portfolio comprises operating system, cross-device productivity applications, server applications, business solution applications, desktop and server management tools, software development tools, among others.

Including other income, Microsoft India reported a total revenue of INR 19,353.7 Cr during the year under review, a 39% increase from INR 13,922.5 Cr from the previous year. 

In line with the increase in revenue, Microsoft India’s net profit rose 30% to INR 648.6 Cr from INR 498.2 Cr in the previous fiscal. 

Meanwhile, expenses stood at INR 18,472 Cr in FY23, a 39.5% increase from INR 10,480.7 Cr in FY22. Microsoft India’s biggest expense was royalty cost. In FY23, the Indian entity spent INR 13,139 Cr on royalty cost, an increase of 51.8% from INR 8,654.7 Cr in the previous fiscal year. 

In simple terms, royalty cost is the amount paid by a company to the owner of a product or patent for the use of that product or patent. 

Employee benefit cost was another major contributor to Microsoft India’s growing expenses. The company spent INR 1,411.3 Cr on employee benefits expenses in FY23, an increase of 16.5% from INR 1,210.8 Cr in the previous year. 

It is worth noting that Microsoft, which has offices across the world, has laid off over 10,000 employees across verticals this year. 

Microsoft India spent INR 372 Cr on advertising and promotional activities, a decline of 15% from INR 436.2 Cr in the previous fiscal year. 

In July this year, Microsoft India president Anant Maheshwari resigned from his position after serving the company for almost seven years.

A Microsoft spokesperson said, “Anant has decided to leave Microsoft to pursue a role outside the company. We would like to thank Anant for his many contributions to our business and culture in India.”