Microsoft India revenue jumps 27 percent in FY25, still just 1 percent of global $282 billion

Microsoft India reported operating revenues of Rs 28,754 crore ($3.24 billion) in FY25, a 27 percent increase over the previous year. The growth pace outstripped Microsoft’s global revenue rise of 17 percent. Yet India still contributes just over 1 percent of Microsoft’s $282 billion global revenue for 2025, according to regulatory filings reviewed via Tofler.

The company’s profit after tax rose 39 percent to Rs 1,245 crore ($140 million), translating into a net profit margin of 4.2 percent — much lower than the 35–36 percent margins posted by the US parent in recent quarters.

A major reason for the weaker profitability: Microsoft India, like most Big Tech subsidiaries, passes a large share of its topline as royalty to the US parent. The royalty covers products such as the Office suite, Azure cloud services and Bing.

Royalty costs surged 29 percent to Rs 20,294 crore ($2.3 billion) in FY25, accounting for 70 percent of Microsoft India’s annual revenue, unchanged from last year.

The company has also undergone a major shift in its revenue mix, as it transitions from licensed and on-premise software to cloud-native services. As a result, services now make up 74 percent of revenue, up from 51 percent in FY20. This segment is estimated to have grown 28 percent to Rs 21,186 crore ($2.4 billion), largely driven by Azure, although an exact breakup was not available.

For comparison, Amazon Web Services (AWS) India recorded Rs 16,789 crore ($1.9 billion) in revenue in FY25, a 15 percent year-on-year increase.

Meanwhile, Microsoft’s retail product revenue share fell sharply from 49 percent to 15 percent, growing only 10 percent this year.

On the cost side, salary expenses rose 12 percent to Rs 1,142 crore ($129 million). Depreciation was the other major expense at Rs 2,398 crore ($271 million). Advertising and promotional spending remained unchanged at Rs 319 crore ($36 million).