The Indian industry is likely to register stable revenue growth in the June quarter of the current fiscal year, supported by resilient domestic demand, but the ongoing geopolitical tensions will continue to impact demand sentiments, especially for export-oriented sectors, rating agency ICRA said on Monday.
In a statement, ICRA said it forecasts India Inc’s operating profit margins at 18.2-18.5 per cent in the first quarter (April-June) of FY ’26. This, coupled with a moderation in interest costs owing to the recent repo rate cuts aggregating to 100 bps, will result in an improvement in the interest coverage ratio for India Inc, the rating agency said.
“Given the uncertain global environment, ICRA expects the private capital expenditure cycle to remain measured. However, sunrise sectors like electronics, semi-conductors and niche segments in the automotive space like electric vehicles will continue to see a scale-up in investments,” ICRA Senior Vice-President Kinjal Shah said. Entities linked with the Indian Railways and defence sectors would also see their large order books translating into revenues and earnings, he said.
"India Inc. is expected to report stable revenue growth in Q1 of FY 2026 supported by resilient domestic demand. While rural demand is expected to remain robust, urban demand is likely to recover, supported by income tax relief and easing food inflation,” ICRA said. However, ongoing geopolitical tensions will have an impact on demand sentiments, especially for export-oriented sectors like agro-chemicals, textiles, auto and auto components, cut and polished diamonds, and IT services.
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