Private Company Sales Grow 8% in Q2 FY26: RBI Report

India’s private sector saw a healthy rise in business activity in the second quarter of FY26, with sales of listed private non-financial companies growing by 8%, up from 5.4% in Q2 FY25 and 5.5% in Q1 FY26. The data, released by the Reserve Bank of India (RBI) on November 24, 2025, is based on quarterly financial results from 3,118 listed non-government, non-financial companies.

This uptick signals improved demand conditions and stronger performance across key sectors, particularly manufacturing, information technology (IT), and wholesale/retail trade.

Manufacturing Sector Leads with 8.5% Sales Growth

The manufacturing segment, consisting of 1,775 companies, saw sales growth climb to 8.5% in Q2 FY26, compared to 5.3% in Q1. Major contributors to this growth included,

• Automobile companies
• Food products
• Electrical machinery
• Chemical industries

These sectors benefited from festive demand, better input management, and improved consumer sentiment.

However, this growth also came with increased raw material costs, which rose by 9%. As a result, the raw material-to-sales ratio edged up to 55.9%, compared to 54.1% in the previous quarter.

Services Sector: Retail Trade Drives Non-IT Growth

The services sector recorded strong growth as well, split between IT and non-IT companies,

• IT companies posted 7.8% sales growth, up from 6% in Q1.
• Non-IT services companies reported a 10.6% growth rate, a sharp increase from 7.5%.

The strong performance of wholesale and retail trade firms was a key driver in the non-IT services surge. This reflects the post-pandemic normalization of retail activity and increased consumer spending.

Staff Costs and Profit Margins Show Mixed Trends

Across all sectors, staffing costs increased compared to the previous quarter,

• Manufacturing: Up by 9.2%
• IT: Up by 6%
• Non-IT Services: Up by 8.9%

The staff cost-to-sales ratio remained stable at 5.8% for manufacturing and 10.7% for non-IT services, while it declined to 47.3% for IT from 48.8% in the last quarter, indicating some efficiency gains in the tech sector.

In terms of operating profit growth,

• Manufacturing companies: Rose to 10.6%
• IT companies: Grew by 7.7%
• Non-IT services: Dropped slightly to 6.5%

However, the operating profit margin improved only for IT companies, while it moderated for manufacturing and non-IT services due to rising input and staffing costs.

Static Facts

• Report released by: Reserve Bank of India (RBI)
• Period covered: Q2 FY26 (July–September 2025)
• Total companies analyzed: 3,118 (listed, private, non-government, non-financial)
• Overall sales growth: 8% (vs. 5.4% in Q2 FY25)
• Manufacturing sales growth: 8.5%
• IT sector sales growth: 7.8%
• Non-IT services sales growth: 10.6%