Indian Companies' Revenue Growth Dips to 7-Quarter Low
ICICI Bank's report reveals a drop in Indian companies' revenue growth to a 7-quarter low of 3.4% YoY for Q1 FY 2025-26. Manufacturing and service sectors both see slower growth due to lower commodity prices and weakened demand, with policy support needed for future recovery.
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- India
In a concerning trend for the Indian economy, companies have experienced their slowest revenue growth in nearly two years, according to a report by ICICI Bank. The report highlights that revenue growth plummeted to a 7-quarter low of 3.4% year-on-year for the first quarter of fiscal year 2025-26, impacting around 3,000 listed entities across both manufacturing and services sectors.
Particularly hit were the manufacturing and services sectors, where growth rates declined sharply amidst falling commodity prices. The manufacturing sector reported a drop from 5.7% to 2.8%, while services growth almost halved from 11.3% to 5.8%. Key factors include lower revenues in trade, transport, and real estate, exacerbated by a quick arrival of the monsoon and sluggish real estate transactions.
Despite the downturn, certain sectors such as steel, cement, and infrastructure benefitted from increased government spending. The report suggests that future revenue improvements could stem from policy adjustments and a potential reconfiguration of GST rates, even as export-reliant sectors face ongoing challenges. Higher profitability in the refinery sector is expected to bolster growth, although weaknesses in consumption could negate some gains.
(With inputs from agencies.)
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