With global supply chain disruptions, raw material expenses of manufacturing companies rose substantially by 27.5 per cent (y-o-y) during Q1 | Photo Credit: ABEER KHAN

Despite significant increase in input costs, operating profit growth of manufacturing companies improved significantly to 21.3 per cent (year-on-year/y-o-y) during Q1 (April-June):2026-27 from 9.4 per cent in the previous quarter, according to RBI data on performance of the private corporate business sector in the first quarter of FY27.

Operating profit growth of IT and non-IT services companies also improved to 19.9 per cent and 12.7 per cent, respectively, during the reporting quarter.

The central bank analysis is based on data drawn from abridged quarterly financial results of 3,247 listed non-government non-financial companies.

On sequential basis, operating profit margin (operating profit as a percentage of revenue) improved across all major sectors during Q1:2026-27 — manufacturing (14.7 per cent vs 13.8 in Q4FY26), IT (22.7 per cent vs 22.1 per cent), services/non-IT (20.9 per cent vs 19.3 per cent).

Sales growth

At aggregate level, sales growth of listed private non-financial companies continued to accelerate to 19.4 per cent (y-o-y) during Q1:2026-27 from 13.9 per cent in the previous quarter.

The RBI said sales of 1,827 listed private manufacturing companies expanded by 21.4 per cent (y-o-y) during Q1:2026-27, up from 14.5 per cent in the previous quarter. This acceleration was majorly driven by the automobiles, petroleum and electrical machinery industries, it added.

Sales growth of information technology companies strengthened further and recorded a double-digit growth of 14.8 per cent (y-o-y) during Q1:2026-27 from 9.9 per cent in the previous quarter.

Non-IT services companies continued to record a healthy double-digit growth of 19.7 per cent (20.3 per cent in the previous quarter), mainly driven by wholesale and retail trade industry.

 Expenditure up

  With global supply chain disruptions, raw material expenses of manufacturing companies rose substantially by 27.5 per cent (y-o-y) during Q1:2026-27; however, raw material to sales ratio declined marginally to 58.1 per cent during Q1 from 58.5 per cent in the previous quarter.

Staff cost of manufacturing, IT and non-IT services companies rose by 12.4 per cent, 7.6 per cent and 11.2 per cent, respectively, during Q1:2026-27, higher than the growth recorded during the previous quarter. 

Published on August 27, 2026