RBI Report Shows Listed Private NFC's Sales Grew 5.5% in Q1 FY26, Slowing from Last Year

Sales of listed private non-financial companies in India rose 5.5% year-on-year in the first quarter of FY26, according to the Reserve Bank of India’s (RBI) latest report. While the sector continued to expand, the pace of growth was noticeably slower compared to 6.9% in the same quarter of FY25. The deceleration highlights challenges across key industries, particularly manufacturing, as companies adapt to moderating demand.

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Manufacturing Sector Under Pressure

The slowdown was most evident in the manufacturing sector, where sales growth dropped in Q1 FY26, compared with the year-earlier earlier. Several industries, including petroleum, recorded lower revenues due to weaker demand and pricing pressures. This trend pulled down overall sales momentum for private firms.

In contrast, the services sector maintained healthier growth, with non-IT reporting an 11.3% rise in sales during the same period. The performance was largely supported by the information technology (IT) sector, which benefited from continued demand for digital services despite global uncertainties.

Expenses and Profit Margins

• The RBI noted that companies’ input cost pressures moderated during the quarter. Raw material expenses for manufacturing firms rose by 4.5% in Q1 FY26, lower than the 8.3% growth recorded in the previous quarter. This allowed firms to protect their profit margins to some extent. The reason behind this moderation led to a lower raw material-to-sales ratio at 54.1%, down from 55.2% in Q4 FY25.
• Profitability gains were driven by easing raw material costs and efficiency improvements in certain sectors.

Net Profits and Interest Costs

Despite the improvement in operating profit, net profits grew at a slower pace in Q1 FY26, down from the year before. Not only Input cost pressures but also operational expenditures have also settled slightly, giving a well-balanced, however cautious outlook.

The report also highlighted that private firms faced rising finance costs, which partly offset the benefits of lower input prices. This suggests companies may continue to see pressure on their bottom line if borrowing costs remain elevated.

Conclusion

The RBI’s data for Q1 FY26 paints a mixed picture of corporate performance. While sales growth slowed, lower expenses helped sustain profitability, particularly in the services sector. However, the drag from manufacturing and rising financial costs could limit overall earnings momentum in the coming quarters. The report indicates that listed private firms must navigate a cautious path amid shifting demand, cost pressures, and financing challenges.