India Inc's revenue saw an estimated 11-11.5% year-on-year growth in Q1FY27, the fastest in eight quarters, driven by pricing power rather than volume. Despite rising input costs due to the West Asia conflict, domestic demand remained resilient, allowing companies to pass on higher expenses, though margins faced pressure.
Crisil Ratings revised its profitability impact forecast for corporate India, now expecting a 100-basis-point decline in operating margins by fiscal 2027, down from an earlier 200 bps. This improvement follows a US-Iran ceasefire and the reopening of the Strait of Hormuz, easing energy prices, though geopolitical risks persist.
India faces rising fuel prices, with petrol and diesel up Rs 7.5/litre since May 15. Crisil predicts this will increase transport and manufacturing costs, potentially leading to higher consumer inflation, especially for food. GST cuts offer some relief, but elevated energy costs remain a concern.
A prolonged West Asia conflict could reduce India Inc's operating profitability by 200 basis points due to supply chain issues and rising costs, Crisil Ratings predicts. Despite this, strong company balance sheets are expected to maintain overall credit quality, though sectors like ceramics and airlines face severe stress.
A prolonged West Asia conflict could reduce India Inc's operating profitability by 200 basis points due to supply chain issues and rising costs, Crisil Ratings predicts. Despite this, strong company balance sheets are expected to maintain overall credit quality, though sectors like ceramics and airlines face severe stress.
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