Sales growth of listed private non-financial companies accelerated to 13.9% year-on-year in the January-March quarter of FY26, up from 10.1% in the preceding quarter, according to data released by the Reserve Bank of India (RBI).

Key Highlights

• Sales growth of listed private firms rose to 13.9% in Q4 FY26.
• Manufacturing and services sectors drove revenue growth despite rising input cost pressures.

The improvement was largely driven by robust performance in the manufacturing and services sectors, reflecting sustained demand across key industries despite persistent cost pressures.

The RBI's analysis is based on the financial results of 3,266 listed non-government, non-financial companies.

Manufacturing Sector Leads Growth Momentum

The number of listed manufacturing companies grew 14.5% in the March quarter, compared to 11.4% growth in the previous quarter. This was driven mainly by strong sales growth from automobile manufacturers, electrical machinery producers, and non-ferrous metal companies, which recorded higher sales growth in the quarter.

Manufacturing continued to be the largest contributor to the overall positive sales growth, which was driven by good domestic demand and decent sectoral growth, the data showed.

IT and Non-IT Services Register Strong Performance

Services also had positive growth in the quarter. Information technology (IT) companies' sales grew at 9.9% in the current quarter (Q4 FY26) compared with 8.8% in the previous quarter, indicating a slow pick-up in technology spending and business demand.

Meanwhile, non-IT services grew by an impressive 20.3% in sales, with a boost from the wholesale and retail trade sector. The rise is marked as a significant uptick in consumer-oriented industries as well as service-based enterprises, reflecting the strength of India's economy.The surge in this figure highlights the robustness of India's consumer-oriented sectors and service-driven businesses.

Rising Input Costs Weigh on Manufacturing Profitability

Although revenues have increased, manufacturing companies continued to experience pressure from escalating inputs costs. The raw material inflation was 18.3% higher compared with the same period of the preceding year, which is higher than sales inflation. The raw material-to-sales ratio, therefore, increased to 58.5% from 57.5% in the previous quarter, reflecting an increase in cost pressures for manufacturers.

This led to a slowdown in operating profit growth for manufacturing to 9.4% in the March quarter compared to 11.8% in the December quarter.

Overall, the figures indicate that the demand situation for manufacturing remained sound, although high input costs persisted to affect profits in manufacturing industries.

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Profit Growth Improves for IT and Services Companies

Services companies had an improvement in operating profitability, unlike manufacturing companies.

This resulted in IT companies' operating profit growth reaching 14.1% in the quarter, driven by better operational efficiency and revenue realization. Non-IT services companies also saw operating profit growth of 6.5%, due to increased business activity and better sales momentum.

The performance reflects the greater ability of services businesses to cope with continued cost pressures in industrial businesses.

Staff Costs and Financial Health Remain Stable

Staff-cost growth of manufacturing companies slowed to 9.8% for the quarter, suggesting a slowdown in staff-related costs.

For services businesses, staff costs grew at a faster rate for businesses that do not focus on IT, with little change experienced for those that do.

The RBI data also revealed a improvement in the financial well-being of manufacturing firms. They increased their interest coverage ratio, a key measure of a firm's debt paying capacity, from 9.0 in the previous quarter to 9.5 in the March quarter. 

Corporate Sector Ends FY26 on Strong Note

India's listed private non-financial companies (NPFC) appear to have been in a better position as sales growth picked up across manufacturing and services industries in the last quarter of FY26, according to the RBI data.

Rising raw material prices continue to be a challenge for manufacturers, but the improvement of revenues, employment costs and interest coverage ratios suggest continued strength of the corporate sector. The new is now pointing to continued business activity and improving economic momentum as the fiscal year begins.