Stable Revenue Growth for Indian Industry Amid Geopolitical Challenges
The Indian industry is projected to experience stable revenue growth in Q1 FY26, driven by strong domestic demand. However, geopolitical tensions affect export sectors. ICRA predicts operating profit margins of 18.2-18.5% and increased interest coverage due to repo rate cuts. Investments may rise in electronics and electric vehicles.
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The Indian industry anticipates stable revenue growth in the June quarter of the current fiscal year, buoyed by strong domestic demand, according to rating agency ICRA. Despite this, geopolitical tensions remain a challenge, particularly for export sectors.
ICRA forecasts that India Inc's operating profit margins will range between 18.2% and 18.5% in the first quarter of FY26. This follows sequential recovery in recent quarters. Reduced interest costs, stemming from a 100 basis point cut in the repo rate, will enhance the interest coverage ratio for Indian companies.
Although ICRA expects a cautious approach towards private capital expenditure due to global uncertainty, investments in emerging sectors such as electronics and electric vehicles are expected to continue growing. The Indian Railways and defense sectors are also set to convert large orders into revenues and earnings.
(With inputs from agencies.)
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