RBI: Private firms' sales growth hits 10.1% on manufacturing boom

Listed private non-financial companies recorded 10.1% sales growth in 2025-26, ending a two-year spell of single-digit growth. The RBI data shows this was driven by a strong recovery in the manufacturing sector, which expanded by 10.8%.

Listed private non-financial companies recorded a double-digit sales growth of 10.1 per cent during 2025-26, marking an improvement after two years of single-digit growth, according to data released by the Reserve Bank of India (RBI) on Wednesday.

The performance was primarily driven by a strong recovery in the manufacturing sector. The RBI's assessment is based on the abridged financial results of 4,278 listed non-government non-financial (NGNF) companies.

The central bank said the acceleration in overall sales growth was mainly led by substantial improvement in manufacturing sector performance. RBI stated, "During 2025-26, at an aggregate level, listed private non-financial companies recorded a double-digit sales growth of 10.1 per cent, after recording single-digit growth in the previous two years."

Manufacturing Sector Leads Recovery

According to the data, sales of manufacturing companies expanded by 10.8 per cent during 2025-26, compared with 6.0 per cent growth in the previous year. The growth was largely supported by the automobile, electrical machinery, food and beverages, and chemical industries. However, the petroleum industry continued to witness contraction in sales during the year.

Growth in Services Sector

The RBI data also showed that sales growth of information technology (IT) companies improved to 7.9 per cent during 2025-26 from 7.1 per cent a year earlier. Non-IT services companies continued to record double-digit sales growth, led by healthy performance in the wholesale and retail trade industry.

Expenditure and Profitability

On the expenditure side, raw material expenses of manufacturing companies increased by 12.0 per cent during 2025-26. The raw material-to-sales ratio rose to 57.6 per cent from 55.7 per cent in the previous year, indicating input cost pressures for manufacturers. Staff costs increased by 10.7 per cent for manufacturing companies, 6.1 per cent for IT firms and 9.0 per cent for non-IT services companies during the year. However, the staff cost-to-sales ratio remained broadly stable for manufacturing companies and declined for services firms.

Despite higher input costs, manufacturing companies were able to improve profitability. Operating profit growth in the manufacturing sector rose to 10.3 per cent during 2025-26 from 6.0 per cent in the previous year. Within the services sector, operating profit growth for non-IT services companies slowed to 7.1 per cent, while IT companies recorded an improvement to 10.7 per cent.

The RBI said operating profit margins for manufacturing and non-IT services companies declined by 30 basis points and 210 basis points, respectively, to 13.9 per cent and 20.0 per cent. In contrast, IT companies saw their operating profit margin improve by 50 basis points to 22.4 per cent.

Improved Debt Servicing

The data further showed that manufacturing companies strengthened their debt-servicing position during the year. The interest coverage ratio improved to 9.1 in 2025-26 from 7.9 in the previous year, supported by higher gross profits and lower interest expenses. (ANI)

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