Automobile and Electrical Machinery Drive Manufacturing Sales Growth in Q4

India's private manufacturing sector showed remarkable resilience in the final quarter of FY2025-26, with sales seeing a significant jump. New data from the Reserve Bank of India (RBI) highlights a robust recovery led by heavy industries and a surging services sector.

Manufacturing Sector Sees Double-Digit Sales Surge

According to the latest RBI report, sales for 1,817 listed private manufacturing companies expanded by 14.5% year-on-year (YoY) during the fourth quarter of 2025-26. This represents a notable acceleration compared to the 11.4% growth recorded in the previous quarter.

The primary engines of this growth were the automobile, electrical machinery, and non-ferrous metals industries. These sectors acted as the backbone of the manufacturing recovery, helping the broader aggregate of listed private non-financial companies maintain a double-digit sales growth of 13.9% during the January-March period, up from 10.1% in the preceding quarter.

Services Sector: IT and Non-IT Performance Divergence

The services sector also exhibited varied but generally positive trends. Information Technology (IT) companies saw their sales growth improve to 9.9% YoY, a step up from the 8.8% growth witnessed in the previous quarter.

However, the real standout in the services domain was the non-IT services segment. This category saw an impressive expansion in sales growth of 20.3%, driven largely by the wholesale and retail trade industries. While IT companies maintained relatively stable staff cost growth, the non-IT services sector experienced a higher pace of increase in staff expenses during the January-March quarter.

Rising Input Costs and Margin Pressures

Despite the top-line growth, the RBI report flags emerging concerns regarding profitability and input costs. Amidst global uncertainties, raw material expenses for manufacturing companies surged by 18.3% YoY during Q4FY26.

This spike in expenses has led to an increase in the raw material-to-sales ratio, which climbed to 58.5% from 57.5% in the previous quarter. This metric indicates significant pressure on input costs for manufacturers. While operating profit margins for the manufacturing sector remained stable on a sequential basis, the services sector saw a moderation in margins during the January-March period.

مینوفیکچررز کے لیے ایک مثبت پہلو یہ ہے کہ عملے کے اخراجات میں سال بہ سال (YoY) اضافے کی شرح کم ہو کر 9.8% رہ گئی، جس سے خام مال کی بڑھتی ہوئی قیمتوں کے خلاف تھوڑا تحفظ فراہم ہوا ہے۔

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