Revenue growth of India's corporate sector likely to be 4-6% in Q1FY26: Crisil Intelligence

Crisil Intelligence has said that the revenue growth of India's corporate sector is estimated at a modest 4-6 per cent in the first quarter of this fiscal year (Q1FY26), down from about 7 per cent in the previous two quarters, due to sluggish performance by power, IT services and steel sectors. The power, coal, IT services and steel sectors collectively account for a third of the revenue of over 600 companies analysed. Nevertheless, five sectors -- pharmaceuticals, telecom services, organised retail, aluminium and airline -- likely drove revenue growth for India Inc in the first quarter. 

It said the steel sector's revenue is expected to have grown a moderate 1-3 per cent on-year, due to planned maintenance shutdowns at major steel mills and a 2-4 per cent on-year decline in prices. On the other hand, the auto sector's revenue is estimated to rise by 4 per cent on-year owing to higher retail sales, partially offset by high inventory. It said an increase in prices stemming from changes in product mix and higher export realisations likely helped revenue grow. The construction sector revenue is expected to climb up 6 per cent on-year as engineering, procurement and construction (EPC) companies benefited from a low base effect caused by disruptions from general elections in the first quarter of last fiscal despite no significant increase in the Union Budget allocation for the sector. 

It said in the first quarter, revenue for pharmaceuticals sector is seen up 9-11 per cent on-year, higher than corporate India's revenue growth for the past 10 quarters, driven by strong export demand and a stable domestic market. It further said telecom services revenue is expected to grow 12 per cent on-year, fuelled by higher realisations of around 11 per cent on account of costlier subscription plans. Organised retail revenue likely rose 15-17 per cent in the first quarter, led by the value fashion and food and grocery segments. Revenue expansion in the steel, cement and FMCG sectors was likely driven by volume growth of 7-9 per cent, 3-4 per cent and 4-5 per cent respectively.

It further said in the cement sector, a low base, the pre-monsoon construction spree and healthy domestic demand pushed volume higher, despite the shutdown of a few mills, while a pick-up in rural demand supported the FMCG sector's volume growth. Aluminium sector's revenue is seen up at 23 per cent, owing to higher domestic demand, particularly through transmission lines, higher domestic output after Bharat Aluminium Company's expansion, more export opportunities from lower trade volatility between major economies, and an improvement in realisations due to a higher share of downstream products. Likewise, airline revenue is expected to rise 15 per cent on-year, driven by an increase of 10-12 per cent in volume owing to expanded supply on account of reduced aircraft groundings and addition of new aircraft.