Latest RBI data shows private non-financial companies maintained strong momentum in Q4FY26, with aggregate sales growth of 13.9% year-on-year, accelerating from 10.1% in the previous quarter. According to the Reserve Bank of India's data released on Tuesday, this growth was driven by manufacturing and services sectors. Sales of 1,817 listed manufacturing companies grew 14.5% in the fourth quarter, compared with 11.4% growth in the previous quarter, with the acceleration led by automobile, electrical machinery and non-ferrous metal companies. The IT sector also showed improvement with sales growth of 9.9% in the March quarter from 8.8% in the preceding quarter, while non-IT services companies reported sales growth of 20.3%, aided by higher growth in the wholesale and retail trade segment.
India's corporate sector delivered a historic earnings performance in FY26, with the profit-to-GDP ratio of Nifty 500 companies rising to an all-time high of 5.2%, according to Motilal Oswal's latest "India Strategy" report. The profit-to-GDP ratio of listed Indian companies also climbed to 5.7%, marking its highest level in the last 18 years. Despite geopolitical tensions, global uncertainty, and a moderation in domestic demand, corporate earnings reached record levels. Auto, Oil & Gas, and Metals emerged as the biggest contributors to this growth, playing a key role in shaping India's earnings story.
The Auto sector emerged as the biggest contributor with profits surging from ₹1,070 billion in FY25 to ₹1,813 billion in FY26, reflecting a 69% increase. Strong demand for passenger vehicles, higher premium vehicle sales, and improving export markets supported this growth. According to the report, Tata Motors Passenger Vehicles contributed 0.15 percentage points to the profit-to-GDP ratio, the highest contribution among all companies. The combined contribution of Auto and Oil & Gas played a major role in pushing Nifty 500 earnings up by 15.6% to ₹18,099 billion in FY26.
Despite strong sales growth, manufacturing companies continued to face pressure from rising input costs. Raw material expenses rose 18.3% year-on-year during the quarter, while the raw material-to-sales ratio increased to 58.5% from 57.5% in the previous quarter. As a result, operating profit growth of manufacturing companies moderated to 9.4% in the March quarter from 11.8% in the preceding quarter. In contrast, IT companies showed resilience with operating profit growth improving to 14.1%, while non-IT services firms recorded 6.5% growth. Manufacturing companies' interest coverage ratio also rose to 9.5 in the March quarter from 9.0 in the preceding quarter.
The Metals sector strengthened its earnings contribution with JSW Steel contributing 0.05 percentage points to the profit-to-GDP ratio, while Tata Steel added 0.02 percentage points. Over the last four years, Nifty 500 profits have nearly doubled from ₹9.8 lakh crore to ₹18.1 lakh crore, while corporate profits expanded at a CAGR of 28.7% during 2020-26, compared with GDP growth of 9.5%.
