Private corporate sector sales grow 13.9 percent in Q4
The Reserve Bank of India (RBI) released data on the private corporate business sector's performance in Q4:2025-26. Listed non-financial companies recorded 13.9 percent sales growth year-on-year, up from 10.1 percent in the previous quarter.
Sales accelerate, costs rise
Listed private non-financial companies recorded a double-digit sales growth of 13.9 percent year-on-year in Q4:2025-26, up from 10.1 percent in the prior quarter.
Manufacturing companies expanded sales by 14.5 percent, driven by automobiles, electrical machinery, and non-ferrous metals.
IT companies' sales growth improved to 9.9 percent, and non-IT services companies saw a substantial 20.3 percent increase, largely from wholesale and retail trade.
This robust top-line performance was met with rising expenditures.
Raw material expenses for manufacturing companies surged by 18.3 percent year-on-year, increasing the raw material to sales ratio to 58.5 percent from 57.5 percent, indicating significant input cost pressure.
Staff cost growth for manufacturing moderated to 9.8 percent, while for non-IT services, it rose to 8.9 percent.
Profitability and debt servicing
Amid rising input costs, operating profit growth for manufacturing companies moderated to 9.4 percent in Q4:2025-26, down from 11.8 percent year-on-year.
Conversely, IT services companies saw operating profit growth improve to 14.1 percent, and non-IT services companies to 6.5 percent.
Sequentially, manufacturing operating profit margins remained stable, while those for the services sector moderated.
Debt servicing capacity showed mixed trends.
The interest coverage ratio (ICR) for manufacturing companies improved to 9.5 in Q4:2025-26 from 9.0, reflecting stronger gross profit growth relative to interest expenses.
Non-IT services companies' ICR held steady at 2.3, while IT firms maintained an elevated ICR during the quarter.
Mixed signals for corporate health
The data presents a nuanced picture of India's corporate sector, with strong top-line growth offset by rising input costs for manufacturers.
While services companies show resilience in profitability, the moderation in manufacturing operating profits highlights persistent cost pressures.
This divergence suggests that the broader economic recovery remains uneven, requiring careful monitoring by policymakers.