Sales growth of listed private non-financial companies improved to 7.2 per cent in FY25 from a low of 4.7 per cent during the previous year, according to RBI data on the performance of the private corporate sector during 2024-25.

Sales of manufacturing sector companies rose by 6.0 per cent in FY25, compared to a 3.5 per cent growth in the previous year, mainly led by the automobile, electrical machinery, food and beverages, and pharmaceutical industries, according to an RBI statement.

On the other hand, among the major industries, petroleum and iron & steel industries recorded a contraction in their sales during FY25.

Despite global headwinds, sales growth of IT companies improved to 7.1 per cent in FY25 from 5.5 per cent in the previous year.

Non-IT services companies recorded double-digit sales growth during 2024-25, led by the healthy performance of the telecommunication, transport, and storage services, as well as the wholesale and retail trade industries.

Input cost pressure

In line with the acceleration in sales, manufacturing companies’ expenses on raw materials rose by 6.6 per cent in FY25; the raw material-to-sales ratio increased to 55.7 per cent in FY25 from 54.2 per cent a year ago, pointing to input cost pressure, the RBI said.

Staff costs rose by 10.0 per cent, 4.4 per cent, and 12.0 per cent in FY25 for manufacturing, IT, and non-IT services companies, respectively. The staff cost-to-sales ratio broadly remained stable for manufacturing companies, while it moderated for services companies.

Pricing power

With the increase in the input costs, the operating profit growth of manufacturing companies moderated to 6.0 per cent during 2024-25 from 12.4 per cent in the previous year; within the services sector, profit growth moderated to 15.9 per cent in 2024-25 for the non-IT services companies, while it inched up to 6.1 per cent for IT companies.

During 2024-25, the operating profit margin moderated by 20 basis points (bps) to 14.2 per cent, 80 bps to 21.9 per cent, and 30 bps to 22.1 per cent for manufacturing, IT, and non-IT services companies, respectively.

The interest coverage ratio (ICR: ratio of earnings before interest and tax to interest expenses; a measure of a company’s debt servicing capacity) improved across major sectors during 2024-25 compared to the previous year; the ICR remained above unity for the major industries during 2024-25.

Published on June 27, 2025