India's private corporate sector accelerates sales growth in the fourth quarter

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Corporate sales growth Q4

Highlights

According to the Reserve Bank of India, in the fourth quarter of 2025-26, the consolidated sales growth of private non-government non-financial companies was 13.9 percent, higher than 10.1 percent in the previous quarter.
In manufacturing companies, raw material expenses increased by 18.3 percent and the raw material-to-net sales ratio reached 58.5 percent, resulting in input cost pressures.
Due to the instructions, no translation is needed as the source and target languages are both English. Therefore, the output is: Due to increased input costs, the operating profit growth of manufacturing companies declined to 9.4 percent, while the operating profit of IT companies increased by 14.1 percent.

This article was translated from the original. Read the original version by our correspondent here.

Sales and Cost Trends in the Fourth Quarter Results

According to data released by the Reserve Bank of India, consolidated sales growth of listed private non-government non-financial companies stood at 13.9 percent year-on-year in the fourth quarter of 2025-26, up from 10.1 percent in the previous quarter. These figures are based on the brief quarterly financial results of 3,266 listed companies and include comparative data for the third quarter of 2025-26 and the fourth quarter of 2024-25.

Sales growth for 1,817 listed private manufacturing companies reached 14.5 percent, compared to 11.4 percent in the previous quarter. According to the RBI, this acceleration is mainly driven by the automobile, electrical machinery, and non-ferrous metals industries.

Sales growth for IT companies improved to 9.9 percent, up from 8.8 percent in the previous quarter. Sales growth for non-IT service companies strengthened to 20.3 percent, with the wholesale and retail trade industry making a significant contribution.

Amid global uncertainties, raw material expenses for manufacturing companies increased by 18.3 percent year-on-year. The ratio of raw materials to sales rose to 58.5 percent in the fourth quarter, up from 57.5 percent in the previous quarter, indicating input cost pressures.

Employee cost growth for manufacturing companies declined to 9.8 percent. In the services sector, employee cost growth for non-IT companies rose sharply to 8.9 percent, while for IT companies, this ratio remained broadly similar to the previous quarter.

Impact on Profitability and Debt Servicing Capacity

Amid a significant increase in input costs, operating profit growth for manufacturing companies declined to 9.4 percent, compared to 11.8 percent in the previous quarter. In contrast, operating profit growth for IT and non-IT service companies improved to 14.1 percent and 6.5 percent, respectively.

Sequentially, the operating profit margin for manufacturing companies remained stable, while for service sector companies, it softened somewhat in the fourth quarter. The ratio of employee costs to sales declined to 5.3 percent and 9.4 percent for manufacturing and non-IT service companies, respectively, though it increased slightly for IT companies.

Due to a greater sequential increase in gross profit compared to interest expenses, the interest coverage ratio for manufacturing companies rose from 9.0 to 9.5. The interest coverage ratio for non-IT service companies remained unchanged at 2.3, while for IT companies, the ratio remained at a high level in the fourth quarter.

Our previous report discussed the sharp rise in India’s wholesale inflation (WPI) to 9.68% in May 2026 and the pressure from fuel and energy prices behind it. That article also mentioned the new WPI series with the 2022-23 base year, changes in the coverage and methodology of goods, and the government’s plan to eventually replace the WPI with the PPI.

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