RBI: Manufacturing profit growth rises to 21.3% in Q1 FY27

Listed private non-financial companies posted 19.4% year-on-year sales growth in Q1 FY27. Manufacturing operating margins rose to 14.7% from 13.8% in the prior quarter, while wholesale and retail trade helped sustain non-IT services momentum.

— Source publishedThu, 27 Aug, 2026, 20:45 IST·First seen Thu, 27 Aug, 2026, 20:48 IST·Source BL · Consumer & Economy

What happened

Reserve Bank of India · RBI said Indian listed companies’ Q1 FY27 sales and operating-profit growth accelerated. Non-IT services growth remained strong, led by

Key facts

  • Manufacturing operating profit growth: 21.3% YoY in Q1 FY27, versus 9.4% in Q4 FY26
  • IT operating profit growth: 19.9% YoY
  • Non-IT services operating profit growth: 12.7% YoY
  • Manufacturing operating margin: 14.7%, versus 13.8% in Q4 FY26
  • IT operating margin: 22.7%, versus 22.1%
  • Non-IT services operating margin: 20.9%, versus 19.3%
  • Aggregate listed private non-financial company sales growth: 19.4% YoY
  • Manufacturing sales growth: 21.4% YoY
  • IT sales growth: 14.8% YoY
  • Non-IT services sales growth: 19.7% YoY
  • Manufacturing raw-material expenses growth: 27.5% YoY
  • Raw-material-to-sales ratio: 58.1%, versus 58.5%
  • Companies analysed: 3,247

Why this matters

Improving profitability across manufacturers and trade-linked services could widen the pipeline for strategic partnerships and acquisitions, though stronger earnings may raise target valuations.

What to watch

  • Q2 FY27 manufacturing sales growth and whether operating margins remain above 14.5%.
  • Wholesale and retail trade revenue growth, inventory days, and working-capital trends.
  • Commodity, freight, and energy price movements that could erode supplier profitability.
  • Retail discounting intensity and pass-through of lower input costs to consumers.
  • Urban versus rural consumption indicators, festive pre-orders, and consumer durable sales.
  • Increase production and distributor inventory for fast-moving discretionary and consumer durable categories.
  • Retailers may negotiate improved trade terms, promotional funding, and faster replenishment commitments from profitable suppliers.
  • Wholesale trade networks are likely to expand credit and stocking selectively where sales momentum is strongest.
  • Consumer-facing firms may raise marketing and festive-season inventory budgets while protecting pricing discipline.

Also reported by