I'm going to start off by saying that I believe your groups are higher than average for the rifle you are using if you are using ammunition its sights were calibrated for. A higher front sight may be useful in your case.

BUT; Military rifles were built to shoot people in combat, not targets. With that in mind the sights were set up for the longest possible "point blank" range. That does not mean what most assume it does. In this case "point blank" means the longest range at which a center hold will hit some point of a human being at every point along the trajectory. For that reason military rifles, especially rifles with the rather crude V notch and pyramyd sights of most Mausers are going to shoot high at most "normal" shooting ranges with the ammo they are designed for.

I have a Yugoslav M48. The lowest sight setting is 200 meters (220 yards more or less) with the 196 Gr heavy ball it's designed for. With this ammunition it is about 5-6" high for me at 100 yards which should put it a few inches high at 200 meters and with a center mass hold would produce a hit on some part of a standing man out past 250 meters. This was exactly what the designers had in mind.

This dosen't affect me much because I hardly ever vountarily shoot my military rifles at ranges under 200 yards, especially my bolt actions.