Domestic rating agency ICRA in its latest report has said that India Inc's revenue growth is likely to moderate to 13-15 per cent in the July-September quarter of 2026-27 (Q2FY27) as compared with the 21.3 per cent growth recorded in Q1FY27.
The agency also warned that India Inc's aggregate operating profit margin (OPM) could contract by 1-1.5 per cent on a year-on-year basis in Q2FY27, mainly due to elevated raw material, fuel, freight and packaging costs that have risen largely due to the ongoing West Asia conflict. It said oil refiners are likely to remain under pressure in Q2FY27 due to petroleum-product under-recoveries and thinner marketing margins. It noted that aviation, automobiles, FMCG, cement and other energy-intensive sectors could also face margin pressures from elevated prices of crude oil and its derivatives, palm oil, coal, etc and the consequent rise in freight and packaging material costs.
However, the report said several sectors are taking pricing actions to pass on higher costs arising from West Asia conflict and the rupee’s depreciation against the US dollar. It said metals and mining companies, upstream oil producers, telecom operators and select utilities are relatively better placed on the margins front, supported by favourable realisations, operating leverage or cost pass-through mechanisms. Despite pressures on margins, it said India Inc's credit metrics are likely to remain resilient.
