Whalesbook
Costs Rise Sharply
Nearly 70% of Indian manufacturers reported a significant rise in production costs relative to sales in Q4 FY26, up from 57% the previous quarter. Higher raw material prices, currency depreciation, and increased logistics and energy expenses are squeezing profit margins for many.
West Asia Tensions Add Pressure
Global tensions, especially the West Asia crisis, are worsening these cost pressures. Volatility in energy markets and supply chain disruptions are driving up transportation and raw material import costs. Manufacturers face a complex and uncertain global economic climate.
Output Steady, Growth Forecast Moderate
Average capacity utilisation stood at about 72%, suggesting some caution among manufacturers. Sectors like metals, textiles, and automotive ran at higher levels, while electronics and capital goods saw lower rates. Overall, most industries expect moderate 5-10% growth in Q4 FY26, with chemicals and pharmaceuticals forecasting stronger gains.
Investment Stable, Hiring Picks Up
Despite cost pressures, companies plan to maintain stable investment levels over the next six months. However, expansion plans are tempered by geopolitical uncertainty, trade restrictions, and operational hurdles. Hiring sentiment shows gradual improvement, with 41% of respondents planning to expand their workforce in the next three months, up from 38%.