MUMBAI: The combined sales of listed private non-financial companies grew in double-digits at 10.1% on-year in the December quarter of the current fiscal after recording single digit growth in the previous 11 quarters, the Reserve Bank has said.
“This acceleration was mainly led by substantial improvement in sales growth of the manufacturing sector,” the central bank said Wednesday in its quarterly report on the ‘Performance of private corporate businesses in Q3 2026.’
The report, drawn from the abridged quarterly financial results of 3,188 listed non-government non-financial companies, said sales of 1,794 listed private manufacturing companies expanded by 11.4 per cent during Q3, up from 8.5 per cent in the previous quarter, mainly driven by higher sales growth in automobiles, electrical machinery and non-ferrous metals industries.
Sales growth of information technology companies continued to improve further to 8.8 per cent from 7.8 per cent in the previous quarter. On the other hand, sales growth of non-IT services companies remained stable at 10.6 per cent from the previous quarter.
On the expenditure side, raw material expenses of manufacturing companies rose by 12.7 per cent during Q3 but that is in line with the higher sales growth; raw material to sales ratio also inched up to 57.5 per cent from 55.9 per cent in the previous quarter, pointing to input cost pressure.
Staff cost of manufacturing and IT companies rose at a higher pace to 12.4 percent and 6.6 per cent respectively compared to the previous quarter. However, for non-IT services companies, the staff cost growth moderated to 8.3 percent from 8.9 percent in the previous quarter. On the other hand, staff cost to sales ratio for manufacturing companies remained stable at 5.8 per cent. However, it moderated for both IT and non-IT services companies from the previous quarter.
On the pricing power of companies, the report said operating profit of manufacturing companies rose 11.8 per cent supported by moderate rise in other operating expenses.
IT companies’ operating profit growth improved to 11.1 per cent, while it moderated to 4 per cent for non-IT services companies during Q3.
Operating profit margin of manufacturing companies moderated sequentially, while it improved for services sector companies.
On the interest expenses of the companies which shows both their leverage as well as their ability to service their debt, the report said with the sequential decline in interest expenses, manufacturing companies’ interest coverage ratio improved to 9 in Q3 from 8.6 in Q2.
Within the services sector, the ratio for non-IT services companies improved to 2.3 in Q3 from 1.9 in the previous quarter, while for IT firms it moderated but continued to remain at an elevated level during Q3.