India's pvt corporate sector posts stronger sales growth in Q2FY26: RBI

India’s private corporate sector saw an improvement in sales and profitability in the second quarter of the current financial year (Q2FY26), supported by stronger performances in manufacturing, IT and services companies, according to data released by the Reserve Bank of India (RBI).

 

The assessment is based on abridged financial results of 3,118 listed non-government, non-financial firms.

 

Overall sales of listed private non-financial companies rose 8 per cent year-on-year (Y-o-Y) in Q2FY26, improving from 5.5 per cent in the previous quarter and 5.4 per cent in the year-ago period, data showed.

 

Manufacturers — accounting for the largest share of the sample — reported an 8.5 per cent rise in sales, driven primarily by automobiles, food products, electrical machinery and chemicals. IT companies recorded a 7.8 per cent increase in sales, up from 6 per cent in Q1. Meanwhile, non-IT services firms posted a robust 10.6 per cent growth, propelled by wholesale and retail trade businesses.

 

Manufacturing companies’ raw material expenses rose 9 per cent Y-o-Y, keeping pace with revenue growth. The raw material-to-sales ratio increased to 55.9 per cent from 54.1 per cent in Q1. 

 

Staff costs also rose across sectors — up 9.2 per cent for manufacturing, 6 per cent for IT firms and 8.9 per cent for non-IT services. Despite the increase, staff cost ratios remained broadly stable for manufacturing and non-IT services, while moderating slightly for IT companies.

 

Data also showed that operating profit growth improved for manufacturers (10.6 per cent) and IT firms (7.7 per cent), but slowed to 6.5 per cent for non-IT services. Operating margins improved sequentially for IT companies but slipped for the other two segments.

 

The interest coverage ratio (ICR) for manufacturers declined to 8.6 in Q2 due to a sequential fall in profit. The ICR for non-IT services stayed broadly stable, while IT companies continued to show “elevated” debt-servicing capacity. An ICR of at least 1 is considered necessary for viability.