ICRA projects a slowdown in India Inc’s revenue growth to 13-15% in the July-September quarter, with rising input costs and global uncertainties squeezing profit margins despite steady demand, signalling a potential shift in corporate performance.
ICRA has projected that revenue growth at India Inc will ease to 13% to 15% in the July-September quarter of 2026-27, down from 21.3% in the June quarter, as higher input costs continue to squeeze earnings even while demand holds up. In its latest assessment, the rating agency said listed non-financial companies are still benefiting from domestic consumption, festive stocking and stronger commodity realisations, but the pace of expansion is likely to cool after a robust first quarter.
The agency expects operating profit margins to narrow by 100 to 150 basis points year on year, reflecting pressure from pricier raw materials, fuel, freight and packaging. ICRA linked much of that cost burden to the ongoing conflict in West Asia and the rupee’s weakness against the dollar. It said many companies have tried to protect margins by raising prices, but that strategy may limit volume growth even if value growth remains firm.
Credit measures should stay comparatively steady, with interest coverage seen at 4.9 to 5.2 times, close to the 5.1 times recorded in the first quarter. ICRA said domestic-demand industries such as automobiles, retail, consumer durables and hospitality are likely to fare better than export-heavy sectors including information technology, apparel and cut-and-polished diamonds, where weak global demand and rising trade barriers remain a drag. Oil refiners, airlines, fast-moving consumer goods makers and cement producers face the sharpest margin pressure, while metals, mining, telecoms and some utilities may be cushioned by better pricing or pass-through mechanisms. A further risk is the forecast of below-normal rainfall in August and September, which could hurt rural demand and lift food inflation, especially for agri-linked businesses.
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