**Manufacturing Sector Sales Surge in 2024-25, Driven by Key Industries**
Sales in the listed manufacturing sector experienced a notable increase of 6% in 2024-25, a significant rise compared to the 3.5% growth recorded in the previous year. This growth was primarily fueled by strong performances in the automobile, electrical machinery, food and beverages, and pharmaceuticals industries, as reported by the Reserve Bank of India (RBI). However, the petroleum and iron & steel sectors faced a decline in sales during the same period.
On June 26, the RBI released data reflecting the performance of the private corporate sector for 2024-25, based on the abridged financial results of 3,902 listed non-government non-financial (NGNF) companies. The sales growth for listed private non-financial companies improved to 7.2%, up from a low of 4.7% in the previous year. Notably, despite facing global challenges, the sales growth of IT companies rose to 7.1%, an increase from 5.5% the year before.
The non-IT services sector also demonstrated robust growth, achieving double-digit sales increases, particularly in telecommunications, transport and storage services, and wholesale and retail trade industries. In tandem with the sales growth, manufacturing companies saw a 6.6% rise in raw material expenses during 2024-25, with the raw material to sales ratio climbing to 55.7%, up from 54.2% the previous year, indicating pressure from input costs.
Staff costs also increased across various sectors, with manufacturing, IT, and non-IT services companies experiencing rises of 10%, 4.4%, and 12%, respectively. While the staff cost to sales ratio remained stable for manufacturing firms, it showed a decline for services companies. The data indicated that due to rising input costs, the operating profit growth for manufacturing companies slowed to 6% in 2024-25, down from 12.4% the previous year. In the services sector, profit growth for non-IT services companies moderated to 15.9%, while IT companies saw a slight increase to 6.1%.
Operating profit margins also experienced a decline, with reductions of 20 basis points for manufacturing, 80 basis points for IT, and 30 basis points for non-IT services, resulting in margins of 14.2%, 21.9%, and 22.1%, respectively.
In summary, while the manufacturing sector showed resilience and growth in 2024-25, challenges such as rising input costs and varying performance across industries highlight the complexities faced by companies in the current economic landscape.
**FAQ**
**What factors contributed to the growth in the manufacturing sector in 2024-25?**
The growth in the manufacturing sector was primarily driven by strong performances in key industries such as automobiles, electrical machinery, food and beverages, and pharmaceuticals, despite challenges from rising input costs and contractions in other sectors like petroleum and iron & steel.
