India’s private corporate sector commenced FY27 with a 19.4% surge in sales, driven by manufacturing and IT, despite profit growth trailing due to escalating operating costs and inflationary pressures.
India’s private corporate sector started FY27 on a firmer footing, with sales rising 19.4% year on year to Rs 21.6 lakh crore in the June quarter, according to reports based on Reserve Bank of India data. That was a sharp improvement on growth of 5.5% a year earlier and 13.9% in the previous quarter, pointing to a broad pickup in demand across much of the economy.
Profit growth, however, did not keep pace. Net profit increased 14.1% to Rs 2.3 lakh crore, slower than in the comparable periods of FY26 and the March quarter. The gap between revenue and earnings reflected higher operating costs, with total expenditure climbing 20.8% in the quarter. Raw material costs rose 25.3%, power and fuel bills increased 19.3%, and tax provisions were up 26.3%, while interest costs edged down 0.4%, offering only limited relief.
The strongest gains came from manufacturing, where sales expanded 21.4% on the back of automobiles, petroleum and electrical machinery, according to The Times of India and Business Standard. Information technology companies also improved, with sales growth accelerating to 14.8% from 9.9% in the previous quarter. Non-IT services remained resilient, posting 19.7% growth, led by wholesale and retail trade. Business Standard said operating profit growth improved to 21.3%, suggesting companies were still able to protect margins to some degree despite the cost pressure.
Labour expenses also moved higher across the board. Staff costs rose 12.4% in manufacturing, 7.6% in IT and 11.2% in non-IT services, compared with the prior quarter, and the share of staff costs in sales increased for manufacturing and non-IT services firms. Moneycontrol reported that operating profit margins improved sequentially across the main sectors and that interest coverage ratios strengthened, indicating better debt-servicing capacity even as global supply disruptions kept input costs elevated. Early-quarter earnings trends had already pointed to a solid start to FY27, with Business Standard noting that listed companies were delivering the fastest revenue growth in 15 quarters.
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