India Inc Enters FY27 on Stronger Footing as Corporate Sales Growth Jumps to 19.4%
New Delhi, August 28, 2026: India’s corporate sector began the new financial year with a notable improvement in business activity, as sales growth among listed private non-financial companies accelerated sharply during the first quarter of FY27, according to data released by the Reserve Bank of India.
The RBI’s latest assessment shows that aggregate sales of 3,247 listed non-government, non-financial companies increased 19.4% year-on-year in Q1 FY27, compared with 13.9% growth in the preceding quarter. The figures indicate that corporate demand gained momentum as the financial year got underway.
Manufacturing Emerges as the Main Growth Engine
Manufacturing companies were at the heart of the improvement. Sales among 1,827 listed private manufacturing companies expanded 21.4% year-on-year, significantly faster than the 14.5% growth recorded in the previous quarter.
The automobile, petroleum and electrical machinery industries were among the principal contributors to the manufacturing expansion. The stronger performance suggests that activity across several industrial segments remained resilient despite challenges in international supply chains.
IT Sector Regains Momentum
India’s information technology industry also showed a stronger performance during the quarter.
IT companies recorded 14.8% year-on-year sales growth, compared with 9.9% in the previous quarter. The improvement marks a return to stronger double-digit expansion and provides an encouraging signal for technology-focused businesses.
Meanwhile, non-IT services continued to maintain a high growth rate. Their sales increased 19.7%, although this was slightly below the 20.3% expansion reported in the previous quarter. Wholesale and retail trade remained an important contributor to the sector.
Rising Costs Remain a Major Challenge
The stronger sales figures came alongside considerable pressure on manufacturers’ expenses.
Raw-material costs for manufacturing companies jumped 27.5% year-on-year during Q1 FY27, reflecting the impact of global supply-chain disruptions. Despite this sharp increase, the raw-material-to-sales ratio edged down to 58.1% from 58.5% in the previous quarter.
The figures suggest that many companies were able to manage the higher cost burden through stronger sales, pricing decisions and improved operating efficiency.
However, continued increases in input prices could become a challenge if companies are unable to pass additional costs on to customers without affecting demand.
Profit Growth Strengthens
Corporate profitability also improved considerably during the quarter.
Manufacturing companies recorded 21.3% growth in operating profits, compared with just 9.4% in the previous quarter. IT companies reported operating-profit growth of 19.9%, while non-IT services recorded 12.7% growth.
Operating-profit margins improved sequentially across the major sectors, indicating that companies were able to protect profitability despite higher expenses.
The improvement in manufacturing profitability was particularly significant because it came at a time when raw-material expenses were increasing rapidly.
Corporate Debt Servicing Shows Improvement
The RBI data also pointed to stronger debt-servicing capacity in some sectors.
The interest coverage ratio for manufacturing companies increased to 10.2 during Q1 FY27. The ratio for non-IT services companies rose to 2.6, supported by stronger gross-profit growth relative to interest expenses.
These developments suggest that improving operating performance is helping several businesses manage their financial obligations more comfortably.
Outlook for the Rest of FY27
The latest numbers provide an encouraging starting point for India’s corporate sector in FY27. Broad-based sales expansion, improving operating profits and stronger manufacturing activity indicate that businesses entered the year with considerable momentum.
At the same time, companies may continue to face risks from volatile raw-material prices, international supply-chain disruptions and uncertain global economic conditions.
For manufacturers in particular, maintaining pricing power while controlling expenses could prove critical in the coming quarters.
Overall, the RBI’s latest data paint a picture of an Indian corporate sector that has started FY27 with stronger sales and profitability. Whether this momentum can continue will depend on domestic demand, global conditions, input costs and the ability of companies to sustain operational efficiency.
