Private Sector Financial Performance Q2 2025: What India’s Private Sector Numbers Really Tell Us

If you follow the markets even casually, you know how much corporate numbers can shift sentiment. Every quarter, we wait to see whether companies are selling more, spending wisely, and actually making money.

The RBI Q2 Corporate Results for FY 2025-26 are out, and they paint a pretty interesting picture of India Inc. Think of this as a simple walkthrough from one friend to another — no jargon, no heavy explanations, just the things that matter.

Let’s break it down.

Why do RBI Q2 Corporate Results even matter?

Most earnings reports come from companies themselves, and each one highlights what they want you to see. RBI’s report is different. It’s a neutral, comprehensive snapshot of more than 3,100 listed private non-financial companies, across manufacturing, IT, and services.

In a way, it’s the closest thing we have to an X-ray of India’s corporate health.

And this quarter, the X-ray shows stronger bones.

Headline Takeaway: Sales Growth Hit 8% This Quarter

Sales grew from 5.5% in Q1 to 8% in Q2, which is a clear sign that demand is picking up. What’s notable is that the growth was broad-based — manufacturing, IT, and non-IT services all moved up.

If you’ve felt that the economy around you has been a little more active lately — more people buying cars, more construction noise, more job openings — this aligns with that feeling.

Manufacturing Led the Charge

(Based on Table 2A)

Manufacturing companies posted a solid 8.5% jump in sales, much better than the 5.3% growth in Q1.

A few interesting bits stood out:

• Automobiles, food products, electrical machinery, and chemicals were the real drivers.
  
• Raw material costs went up 9%, almost in sync with sales.
  
• Operating profits improved 10.6%, showing better pricing power.
  

IT Sector: Steady and Reliable

(Tables under IT Section)

IT companies continued their familiar, dependable pace:

• Sales grew 7.8% (vs 6% last quarter)
  
• Operating profit grew 7.7%
  
• Staff costs remained high — nearly 47% of sales
  

That last point is no surprise. Anyone who works in IT knows the talent cost is the biggest cost.

But the good news is that IT companies improved margins a bit this quarter, which hints at stabilisation after a rough year globally.

Non-IT Services: The Dark Horse of Q2

Non-IT service companies (like retail, logistics, hotels, real estate, business services) grew a strong 10.6%, up from 7.5% last quarter.

This was largely driven by:

• Wholesale and retail trade
  
• Transport and storage
  
• Construction
  

If you’ve been seeing busier malls, more delivery vehicles, and packed restaurants, well… the numbers agree.

Expenses Are Rising, But Not Alarmingly

(Table 1B ratios)

Raw material costs went up, staff costs climbed, but the rise wasn’t out of control.

Key expense ratios:

• Raw material-to-sales ratio: 53.1%
  
• Staff cost-to-sales ratio: 10.7%
  
• Interest-to-sales: 2.5%
  

Companies are spending more, but it’s aligned with revenue growth — which is what you want.

Pricing Power Came Back (Finally!)

You’ll like this part.

Operating profits improved sharply:

• Manufacturing: +10.6%
  
• IT: +7.7%
  
• Non-IT services: Slight dip, but still healthy
  

This means companies could raise prices or manage costs better. It’s a sign of resilience — something India Inc struggled with during the inflation-heavy years.

Interest Coverage Ratio (ICR): Still Strong

Manufacturing ICR dropped from 9.6 to 8.6, but that’s still very healthy.
IT companies continue to have extremely strong ICR, thanks to high margins and low debt burdens.

ICR above 8 basically means companies earn enough to comfortably repay interest, which reduces default risk — good news for lenders and investors.

Industry-Wise Highlights

(Based on Table 5A)

Some sectors that did particularly well:

• Automobiles: Strong double-digit profit and sales growth
  
• Chemicals: Broad improvement
  
• Electrical machinery: Solid rise in profits
  
• Pharmaceuticals: Improved margins
  
• Retail trade: Sales up thanks to festive demand and urban consumption
  

Some sectors that struggled:

• Textiles (still recovering)
  
• Metals (weak global demand)
  
• Telecom (higher expenses, mixed profits)
  

So What Does All This Mean for You and Me?

Here’s the human side of the RBI Q2 Corporate Results:

• Jobs in manufacturing and services may become more stable.
  
• Consumption is rising — people are buying more.
  
• Companies are more confident than last quarter.
  
• Demand is broad, not limited to a few industries.
  

And yes, markets usually respond positively when corporate health improves. This doesn’t mean you should rush into buying stocks, but it does mean the sentiment is shifting toward optimism.

A Simple Summary of RBI Q2 Corporate Results

• Sales growth: 8%
  
• Manufacturing: +8.5%
  
• IT: +7.8%
  
• Non-IT services: +10.6%
  
• Operating profits: Strong improvement
  
• Expenses: Rising moderately
  
• Corporate health: Stable, improving, broad-based
  

Overall, this quarter tells the story of an economy that is picking up pace after months of uneven growth.