Corporate revenue is expected to have recorded a modest 5-6% year-on-year growth in the July-September quarter of current financial year 2025-26, said research and rating firm Crisil in a report.
The slowdown in revenue growth is estimated primarily on account of weak performance in key sectors such as power, coal, information technology (IT) services and steel.
The estimate is based on Crisil’s analysis of over 600 companies which account for more than half of the market capitalisation of the National Stock Exchange.
“Continuing geopolitical uncertainties weighed on the IT services sector, with project deferrals likely limiting revenue growth to 1%. In the steel sector, despite volume growth of 9%, revenue is expected to have grown a moderate 4% on-year owing to a decline in steel prices. Notably, hot-rolled coil prices declined 1% and primary thermo-mechanically treated steel declined 6% on-year,” Crisil said in a release.
As per the rating agency, the power sector’s revenue likely grew a mere 1%, affected by a surge in hydro-generation because of monsoon being 108% of the long-period average and a 10% rise in renewable energy generation, which led to reduced demand for coal generation. As a result, the coal sector’s revenue growth was likely flat.
“The rationalisation of goods and services tax rates created anticipation of new stock with lower prices, causing a temporary disruption in segments such as passenger vehicles and fast-moving consumer goods (FMCG). As a result, retailers and distributors delayed FMCG purchases, while high inventory levels and sluggish retail sales affected demand for passenger vehicles in Q2. However, the rural economy received a boost from a copious monsoon. Farmer sentiment also improved after the government announcement of higher minimum support prices for kharif crops. This drove up sales of tractors and two-wheelers, which likely contributed 9% to the growth of the auto sector,” said Pushan Sharma, Director, Crisil Intelligence.
As per the study, cement, pharmaceuticals and telecom services sectors are also expected to have propelled growth. The cement sector likely rebounded with 8% revenue growth following a 6-7% on-year increase in volume over a low base and pre-festival demand. The pharmaceutical sector is expected to have grown 8%, driven by healthy export demand and stable domestic market conditions. Telecom services revenue likely grew 7% because of higher realisations on account of costlier subscription plans, even as subscriber growth was flat.
“The top seven sectors that collectively account for more than half of India Inc’s revenue likely saw margins decline during the quarter. For instance, the automobile sector’s margins are expected to have contracted 150-200 bps on-year owing to the continual rise in aluminium prices (+11% on-year during the quarter). Margins for the aluminium sector likely moderated 100-150 bps on-year because of lower export realisations on account of lower regional premiums. Additionally, companies that sold alumina at a premium over the past few quarters will face pressure from falling global prices,” said Elizabeth Master, Associate Director, Crisil Intelligence.
