India’s private corporate sector ended the financial year 2025-26 on a strong note. According to the latest data released by the Reserve Bank of India (RBI), listed private non-financial companies reported healthy growth in sales during the January-March 2026 quarter (Q4 FY26). The report is based on the financial results of 3,266 listed non-government, non-financial companies across manufacturing, information technology (IT), and services sectors.
Overall Sales Growth Improved
The RBI data shows that total sales of listed private non-financial companies grew by 13.9% year-on-year during the fourth quarter of FY26. This was higher than the 10.1% growth recorded in the previous quarter, indicating stronger business activity across the economy. In simple terms, companies sold significantly more goods and services compared to the same period last year, showing continued demand and economic momentum.
Manufacturing Sector Performed Well
The manufacturing sector remained one of the major growth drivers. Sales of 1,817 listed manufacturing companies increased by 14.5% year-on-year during Q4 FY26, compared with 11.4% growth in the previous quarter.
The RBI noted that this faster growth was mainly driven by industries such as:
- Automobiles
- Electrical machinery
- Non-ferrous metals
These sectors witnessed stronger demand and higher business activity during the quarter.
IT Companies Continued to Grow
India’s Information Technology (IT) sector also showed improvement. Sales growth of listed IT companies increased to 9.9% year-on-year, compared with 8.8% in the previous quarter. Although IT growth was lower than manufacturing growth, the sector continued to expand steadily despite global economic uncertainties.
Non-IT Services Sector Recorded Strongest Growth
The biggest improvement came from non-IT service companies. Sales growth in this segment jumped to 20.3% year-on-year during Q4 FY26, making it the fastest-growing major sector among listed companies. This growth was largely driven by higher business activity in the wholesale and retail trade industry. This indicates that consumer spending and trading activities remained strong during the quarter.
Rising Raw Material Costs Put Pressure on Companies
While sales improved, companies also faced higher costs. Manufacturing companies reported an 18.3% increase in raw material expenses during Q4 FY26. The ratio of raw material costs to sales increased from 57.5% to 58.5%, showing that businesses had to spend more on inputs such as metals, chemicals, components, fuel, and other production materials.
The RBI attributed this rise partly to global uncertainties and higher input costs. In simple words, companies sold more products, but they also had to spend more money to manufacture them.
Employee Costs Show Mixed Trend
The report also analysed employee expenses, often referred to as staff costs. For manufacturing companies, staff cost growth slowed to 9.8% year-on-year compared with the previous quarter.
In contrast, non-IT service companies experienced a faster increase in staff costs, with growth reaching 8.9%. IT companies witnessed broadly stable staff cost growth during the quarter.
The ratio of staff costs to sales declined for manufacturing and non-IT service companies, indicating improved operational efficiency. However, this ratio increased slightly for IT firms.
Profit Growth Was Mixed Across Sectors
The increase in raw material costs affected profitability in manufacturing. Operating profit growth of manufacturing companies slowed to 9.4% during Q4 FY26 from 11.8% in the previous quarter.
Operating profit means the profit earned from normal business operations before interest and taxes are deducted.
Although manufacturing companies earned more revenue, rising input costs reduced the pace of profit growth.
On the other hand:
- IT companies recorded operating profit growth of 14.1%
- Non-IT service companies recorded operating profit growth of 6.5%
Both sectors showed improvement compared with the previous quarter.
Profit Margins Remained Stable
The RBI’s analysis shows that the operating profit margin of manufacturing companies remained broadly stable during the quarter.
Operating profit margin indicates how much profit a company earns from every rupee of sales after meeting operating expenses.
However, service sector companies saw some moderation in their profit margins during the quarter.
Companies Improved Their Ability to Repay Debt
The report also examined companies’ debt-servicing capacity through the Interest Coverage Ratio (ICR).
ICR measures how easily a company can pay interest on its borrowings. A higher ratio indicates stronger financial health.
Manufacturing companies improved their ICR from 9.0 to 9.5 during Q4 FY26 because profits increased faster than interest expenses.
For non-IT service companies, the ICR remained unchanged at 2.3, while IT companies continued to maintain very strong debt-servicing capacity.
The RBI notes that an ICR above 1 is generally considered necessary for a company to remain financially viable.
What the Report Means
The RBI data suggests that India’s private corporate sector remained resilient during the final quarter of FY26. Strong growth in manufacturing, retail trade, and services helped companies achieve double-digit sales growth. IT companies also continued their steady expansion.
However, rising raw material costs emerged as a key challenge, especially for manufacturing firms, putting pressure on profit growth. Despite this, companies generally maintained healthy profitability and improved their ability to service debt.
Overall, the report paints a positive picture of India’s corporate sector, with higher sales, improving business activity, and stable financial health across most industries during the January-March 2026 quarter.
