India's private corporate sector accelerates sales growth in 2025-26

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Corporate sales growth 2025-26

Highlights

In 2025-26, consolidated sales of Indian listed private non-financial companies rise by 10.1 percent, with the main contribution coming from the manufacturing sector.
Operating profit of manufacturing companies increases by 10.3 percent, while operating profit margin declines by 30 basis points to 13.9 percent due to input cost pressures.
Interest coverage ratio for manufacturing companies rises from 7.9 to 9.1, reflecting improved debt servicing capacity due to lower interest expenses.

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

Key Financial Performance Indicators for 2025-26

Reserve Bank of India According to data released by the Reserve Bank of India, consolidated sales of listed private non-financial companies rise by 10.1 percent in 2025-26, compared to single-digit growth in the previous two years. This acceleration is mainly driven by improved sales growth in the manufacturing sector.

Sales of manufacturing companies increase by 10.8 percent in 2025-26, up from 6.0 percent the previous year. The automobile, electrical machinery, food & beverages, and chemicals industries lead this growth, while the petroleum sector continues to record sales contraction among major segments.

Sales growth of IT companies rises from 7.1 percent to 7.9 percent. Non-IT service companies also maintain double-digit sales growth in 2025-26, with the wholesale and retail trade sector showing strong performance.

On the cost side, raw material expenses for manufacturing companies rise by 12.0 percent, and the raw material-to-sales ratio increases from 55.7 percent to 57.6 percent, indicating input cost pressures. Staff costs increase by 10.7 percent, 6.1 percent, and 9.0 percent for manufacturing, IT, and non-IT service companies, respectively.

Impact on Margins, Profit, and Debt Servicing Capacity

Despite rising input costs, operating profit of manufacturing companies grows by 10.3 percent in 2025-26, up from 6.0 percent the previous year. Within the services sector, operating profit growth of non-IT service companies slows to 7.1 percent, while IT companies see an improvement to 10.7 percent.

Operating profit margin for manufacturing companies declines by 30 basis points to 13.9 percent, and for non-IT service companies, it drops by 210 basis points to 20.0 percent. In contrast, IT companies' operating profit margin rises by 50 basis points to 22.4 percent.

With higher gross profit and lower interest expenses, the interest coverage ratio for manufacturing companies improves from 7.9 to 9.1, indicating better debt servicing capacity. The ratio for non-IT service companies remains unchanged at 2.2, while IT companies maintain a high level.

Our previous report discussed the reasons behind the decline in growth of India's eight core industries to 0.5% in May 2025, with contraction in five out of eight sectors. It highlighted that weak output in refinery products, coal, crude oil, natural gas, and fertilizers put pressure on overall momentum, while strength in electricity, cement, and steel provided some support.

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