India’s corporate sector has reported a slowdown in sales growth during the first quarter of the current financial year, raising concerns about weakening demand in key industries such as information technology and manufacturing. According to the Reserve Bank of India’s (RBI) latest data, the sales growth of listed private non-financial companies fell to 5.5% in Q1 FY26, down from 6.9% recorded in the same quarter last year.
IT and Manufacturing Drag Overall Growth
The RBI report indicates that sluggish performance in the IT services sector and in manufacturing industries were the primary reasons behind the slowdown. Analysts suggest that weaker global demand for IT exports and rising input costs in manufacturing have contributed to this trend.
Despite the moderation in sales growth, companies continued to benefit from relatively stable demand in domestic markets such as consumer goods and retail, which prevented a sharper decline. Sectors like pharmaceuticals, telecom, and power generation also provided some support to overall revenue figures.
Profit Margins Show Mixed Trends
While sales growth slowed, profitability patterns varied across sectors. Some firms managed to maintain their operating margins by cutting costs and optimizing expenditure, but others faced significant pressure due to higher raw material and wage costs.
Experts note that large-cap companies are better positioned to absorb such pressures compared to mid-sized and small firms, which remain vulnerable to volatility in demand and costs.
External and Domestic Factors at Play
Economists believe that multiple factors have contributed to the slower revenue growth. Globally, uncertainties around trade, especially tariff escalations with the United States, have created headwinds for Indian exporters. Domestically, while private consumption remains robust, investment demand has not picked up at the expected pace, leading to a drag on industrial growth.
“Corporate India is facing a transitional phase where domestic demand remains healthy, but external conditions are challenging. Unless investment demand strengthens and global trade flows stabilize, sales growth is likely to remain subdued in the near term,” said a senior economist tracking RBI’s corporate sector data.
Outlook for Coming Quarters
The slowdown in sales growth has prompted calls for policy support to boost industrial activity and exports. The government’s continued emphasis on capital expenditure, infrastructure building, and Make-in-India initiatives are expected to provide momentum. Additionally, the upcoming festive season may boost consumer demand, offering some relief to sectors like retail, automobiles, and FMCG.
However, analysts caution that if the external environment worsens—especially with rising tariffs and global economic uncertainties—India’s corporate sector could face a prolonged period of slower revenue growth.
The VUK Business Bureau covers economic developments, policy updates, and market trends with clarity and precision. Focused on delivering in-depth analysis of finance, trade, taxation, and entrepreneurship, the bureau provides readers with reliable insights into how business and economic decisions impact everyday life in Uttarakhand and across India.
