Manufacturing Rebound Drives Private Firm Sales Growth Back to Double Digits, RBI Reports

Manufacturing Rebound Drives Private Firm Sales Growth Back to Double Digits, RBI Reports​

The market for listed private non-financial companies has witnessed a significant turnaround, returning to double-digit sales growth in the financial year 2025-26. This resurgence was primarily fueled by robust performance across the manufacturing sector, according to data released by the Reserve Bank of India (RBI).

After navigating two consecutive years where growth remained restricted to single digits, listed private firms saw aggregate sales expansion reaching 10.1 per cent in 2025-26. This vital metric indicates a marked improvement in business health and operational momentum across key industrial segments.

Manufacturing Leads Strong Sectoral Recovery​

The manufacturing industry stood out as a dominant driver of this positive trend, recording an impressive 10.8 per cent expansion during the period. This performance represents a substantial uplift compared to the 6.0 per cent growth seen in the preceding year.

Key contributors to this robust manufacturing rebound included the automobiles sector and electrical machinery firms. Furthermore, the food & beverages industry alongside chemical manufacturers also significantly bolstered the sectoral growth figures.

Services Sector Performance and Oil Industry Contraction​

While manufacturing excelled, other segments displayed mixed results. Non-IT services companies maintained a steady double-digit sales growth trajectory during 2025-26. This consistent performance was widely attributed to healthy business activities within both the wholesale and retail sectors.

Meanwhile, the IT sector also saw incremental improvement, with sales growth inching up to 7.9 per cent. This figure represents an increase from the 7.1 per cent growth recorded in the prior year. However, the petroleum industry continues to face headwinds, recording a contraction in sales during the reporting period.

Input Cost Pressure Signals Headwinds Amid Growth​

Despite widespread increases in top-line sales figures, cost pressures present a counter-narrative to the strong growth data. Raw material expenses for manufacturing companies saw a notable rise of 12.0 per cent in 2025-26.

This expense increase caused the raw material-to-sales ratio to climb to 57.6 per cent, up from 55.7 per cent in the previous year. The rising ratio highlights persistent input cost pressure within the manufacturing value chain.

Staff Cost Analysis Across Key Industries​

Staffing costs also saw differential growth across the key industries analyzed by RBI. Manufacturing companies recorded a rise in staff costs amounting to 10.7 per cent during FY25-26.

For the IT sector, staff costs increased by 6.1 per cent. In the non-IT services segment, staff costs rose by 9 per cent. The RBI noted that while staff cost-to-sales ratio remained broadly stable for manufacturing companies, it exhibited a decline for those operating in the service domain.