Corporate Sales Surge Accelerates as Manufacturing Sector Drives Up Growth in FY25-26, RBI Finds

Corporate Sales Surge Accelerates as Manufacturing Sector Drives Up Growth in FY25-26, RBI Finds​

The Reserve Bank of India (RBI) today released comprehensive data on the performance of the private corporate sector for the fiscal year 2025-26. The report provides deep insights into how NGNF companies have managed rapid sales acceleration despite increasing input costs and expenditure pressures.

Drawn from the abridged financial results of 4,278 listed non-government non-financial (NGNF) companies, the RBI data sheds light on the health and structure of India's private business landscape. The detailed findings cover growth rates, operational ratios, and profitability trends across various sectors.

Robust Sales Growth Across Private Sector​

The aggregate sales of listed private non-financial companies recorded a significant double-digit growth of 10.1 per cent in 2025-26. This level represents an acceleration compared to the single-digit growth observed in the previous two years, signaling stronger market momentum.

A major driver behind this overall expansion was the manufacturing sector. Companies in manufacturing saw their sales expand by 10.8 per cent, significantly surpassing the 6.0 per cent growth registered in the preceding year. This robust performance was predominantly fueled by key industries such as automobiles, electrical machinery, chemicals, and food & beverages.

Meanwhile, the IT services segment also recorded sustained upward movement, with sales growing by 7.9 per cent during 2025-26, up from 7.1 per cent previously. Non-IT services companies maintained a strong showing, reporting double-digit sales growth driven primarily by the wholesale and retail trade industry.

Input Cost Pressures Challenge Manufacturing Gains​

While sales demonstrated strength, expenditure data highlighted increasing cost pressures across industries. Raw material expenses for manufacturing firms rose substantially by 12.0 per cent during the fiscal year.

This rise in inputs translated into a shift in resource allocation within businesses. The raw material to sales ratio increased to 57.6 per cent in 2025-26, up from 55.7 per cent in the previous year. This increase underscores persistent input cost inflation impacting overall corporate profitability.

Staff costs also saw considerable increases across different sectors of the economy. Staff expenditure rose by 10.7 per cent for manufacturing companies and 9.0 per cent for non-IT services firms. Conversely, IT sector companies reported a moderate rise in staff costs at 6.1 per cent during the period.

Profitability Dynamics and Sectoral Resilience​

Despite the challenges posed by rising input costs, operating profit growth showed varied resilience across the sectors. Operating profit for manufacturing companies improved by 10.3 per cent, up from 6.0 per cent in the previous year. This indicates a degree of pricing power within key industrial segments.

In contrast, services sector performance was bifurcated. Operating profit for non-IT services firms decelerated to 7.1 per cent during 2025-26. However, IT companies displayed strong profitability, with operating profits improving by 10.7 per cent in the same period.

Analyzing profitability margins reveals a trend of careful management and improvement in technology hubs. The manufacturing sector saw its operating profit margin decline by 30 basis points (bps) to 13.9 per cent. IT companies, however, managed to improve their operating profit margin significantly by 50 bps to 22.4 per cent.

Interest Coverage Ratios and Financial Health​

The report also examined the debt servicing capacity of corporations through the Interest Coverage Ratio (ICR). For manufacturing firms, ICR improved to 9.1 during 2025-26 from 7.9 in the previous year. This enhancement was attributed to a combination of higher gross profit coupled with declining interest expenses.

In the services segment, non-IT companies maintained an ICR level of 2.2 for 2025-26, matching the prior year's figure. Meanwhile, the ICR for IT firms continued to remain at an elevated level, demonstrating strong financial stability and debt servicing capacity within the tech industry.