India Inc Sales Growth Accelerates to 19.4% in Q1 FY27, Manufacturing Leads Recovery: RBI

India's private corporate sector has shown robust growth in Q1 FY27, with sales and operating profits increasing, as per the Reserve Bank of India (RBI), reported on ANI news report.  

The data, derived from 3,247 listed non-government non-financial companies, indicates a sales growth acceleration to 19.4% year-on-year, up from 13.9% in the previous quarter. 

Manufacturing Sector Drives Recovery 

The manufacturing sector emerged as a key driver of this growth. Sales for 1,827 listed private manufacturing companies expanded by 21.4% year-on-year in Q1 FY27, a notable increase from 14.5% in the previous quarter. Industries such as automobiles, petroleum, and electrical machinery contributed significantly to this acceleration. 

IT and Non-IT Services Performance 

The IT sector also experienced growth, with sales increasing by 14.8% year-on-year, compared to 9.9% in the previous quarter. Non-IT services companies maintained healthy double-digit growth at 19.7%, slightly lower than the 20.3% recorded previously, supported mainly by wholesale and retail trade. 

Cost Pressures and Profit Margins 

Despite facing elevated input costs, companies managed to improve their pricing and operating leverage. Raw material expenses for manufacturing companies surged by 27.5% year-on-year, yet the raw material-to-sales ratio slightly decreased to 58.1% from 58.5% in the previous quarter.  

Operating profit growth for manufacturing companies jumped to 21.3% year-on-year, up from 9.4% in the previous quarter. IT and non-IT services companies recorded operating profit growth of 19.9% and 12.7%, respectively. 

Read More: Hindalco Share Price in Focus; Commissions India’s First Superfine PPT ATH Plant! 

Improved Debt-Servicing Capacity 

The interest coverage ratio for manufacturing companies increased to 10.2 in Q1 FY27, while non-IT services companies saw an increase to 2.6, driven by a higher rise in gross profits compared to interest expenses. IT companies maintained a strong interest coverage ratio. 

Conclusion 

India Inc's sales growth accelerated to 19.4% in Q1 FY27, with manufacturing leading the recovery. Manufacturing sales grew by 21.4%, while IT and non-IT services recorded 14.8% and 19.7% growth, respectively. Operating profit margins improved across sectors. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.