Private corporate sales rebound 10.1% in FY26, manufacturing leads broad-based recovery: RBI data

India’s private corporate sector staged a firm recovery in FY26, with listed private non-government non-financial (NGNF) companies recording a 10.1% rise in sales, according to the Reserve Bank of India’s latest assessment of corporate performance. The data, based on financial results of 4,278 listed companies, signals a return to double-digit growth after two years of moderation.

“During 2025-26, at aggregate level, listed private non-financial companies recorded a double-digit sales growth of 10.1%, after recording single digit growth in previous two years,” the Reserve Bank of India said in its report. It added that the improvement was broad-based, with manufacturing emerging as the key growth driver.

Manufacturing drives cyclical upswing

Manufacturing sales expanded by 10.8% in FY26 compared with 6% a year earlier, driven by automobiles, electrical machinery, food & beverages and chemicals, as per RBI data. However, the petroleum segment continued to report contraction in sales.

“Sales of manufacturing sector companies expanded by 10.8% during 2025-26 as compared to 6% growth in the previous year, mainly led by automobiles, electrical machinery, food & beverages and chemicals industries,” the RBI noted.

Services remain steady; IT edges higher

The services sector continued to show resilience. IT companies recorded sales growth of 7.9%, up from 7.1%, while non-IT services maintained double-digit expansion, supported by wholesale and retail trade activity.

“Sales growth of IT companies inched up further to 7.9% during 2025-26 from 7.1% in the previous year. Non-IT services companies continued to record double digit sales growth during 2025-26,” the central bank said.

Input costs rise, profitability holds

Cost pressures persisted, with manufacturing raw material expenses rising 12% and the raw material-to-sales ratio increasing to 57.6% from 55.7%, indicating elevated input costs.

“Raw material expenses of manufacturing companies rose by 12.0% during 2025-26; raw material to sales ratio increased… pointing to input cost pressure,” RBI stated.

Despite this, operating performance remained resilient. Manufacturing operating profit growth improved to 10.3% from 6%, while IT firms posted 10.7% growth. Non-IT services, however, moderated to 7.1%.

Margins mixed; leverage metrics improve

Operating margins declined in manufacturing and non-IT services, but improved in IT. On the balance sheet side, manufacturing firms saw their interest coverage ratio rise to 9.1 from 7.9, reflecting improved debt servicing capacity.

“With higher rise in gross profit coupled with decline in interest expenses, manufacturing companies’ interest coverage ratio improved to 9.1 during 2025-26 from 7.9 in the previous year,” RBI said.

Overall, the RBI data points to a cyclical upswing in corporate activity led by manufacturing strength and stable services demand, even as cost and margin pressures remain uneven across sectors.