According to the Reserve Bank of India's latest update, listed private non-financial companies recorded double-digit sales growth of 10.1% during 2025-26, marking a significant acceleration from single-digit growth in the previous two years. This improvement was primarily driven by substantial enhancement in manufacturing sector performance, as reported by The Economic Times. The sales growth represents a significant rebound for Indian companies after remaining in single digits for the last two years.
The manufacturing sector emerged as the primary growth driver with sales expanding by 10.8% during 2025-26, compared to 6.0% growth in the previous year. Key contributors included automobiles, electrical machinery, food & beverages, and chemicals industries, as reported by The Economic Times. However, the petroleum industry continued to face challenges with sales contraction during the same period, highlighting the sectoral divergence in manufacturing performance.
IT companies showed steady improvement with sales growth increasing to 7.9% during 2025-26 from 7.1% in the previous year, according to The Economic Times. Non-IT services companies maintained their strong performance trajectory, continuing to record double-digit sales growth during 2025-26, led by healthy performance from the wholesale & retail trade industry. The services sector's resilience contributed significantly to the overall double-digit growth achievement.
Despite strong sales growth, manufacturing companies faced significant input cost pressures with raw material expenses rising by 12.0% during 2025-26, as reported by The Economic Times. The raw material to sales ratio increased to 57.6% from 55.7% a year ago, pointing to sustained input cost pressure. Staff costs also increased across sectors, rising by 10.7% for manufacturing, 6.1% for IT, and 9.0% for non-IT services companies. However, the staff cost-to-sales ratio remained stable for manufacturing companies while declining for services companies.
Despite cost pressures, manufacturing companies' operating profit growth improved to 10.3% during 2025-26 from 6.0% in the previous year, according to The Economic Times. However, operating profit margins declined across most sectors, with manufacturing margins falling by 30 basis points to 13.9% and non-IT services margins declining by 210 basis points to 20.0%. IT companies showed improvement with margins rising by 50 basis points to 22.4%.
