Q4 Sees Surge in Sales for Listed Private Manufacturing Firms Fueled by Automobile and Electrical Machinery Growth, Reports RBI
In the fourth quarter of the fiscal year 2025-26, the performance of the listed private manufacturing companies demonstrated a significant turnaround, with sales expanding by 14.5% year-over-year. This marks an increase from the prior quarter’s growth of 11.4%, primarily fueled by robust demand in the automobiles, electrical machinery, and non-ferrous metals sectors. The aggregate sales growth of all listed private non-financial companies also exhibited strength, recording a double-digit increase of 13.9%, up from 10.1%, indicating a stable recovery trajectory in corporate earnings.
The Reserve Bank of India’s data highlights a distinct uptick in the Information Technology sector as well, with sales growth improving to 9.9% from 8.8% quarter-on-quarter. Notably, non-IT services expanded even more impressively at 20.3%, driven chiefly by activity in wholesale and retail trade. This trend underscores a broadening recovery across sectors as they navigate the persistent uncertainties in the global market.
However, these positive growth figures are tempered by rising input costs. Raw material expenses for manufacturing firms surged by 18.3% year-over-year, with the raw material-to-sales ratio increasing to 58.5% from 57.5%. This indicates that while companies are managing to grow revenues, they are also grappling with higher operational costs. Conversely, staff cost growth in manufacturing has moderated to 9.8%, suggesting some cost control measures are being implemented.
Furthermore, while operating profit margins for manufacturing companies have remained stable, the services sector saw a slight decline in margins during this quarter. This nuanced landscape presents both challenges and opportunities for investors closely tracking sectoral performance in response to market dynamics and rising costs. Caution is warranted, as continuous monitoring of input cost fluctuations and their impact on profit margins will be crucial for assessing future corporate profitability in the evolving economic environment.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova team.)