India Inc's revenue growth slows to 4-6% in Q1 FY26
What's the story
India's corporate sector witnessed a slowdown in revenue growth, posting a modest increase of 4-6% year-on-year in the first quarter of fiscal 2026. The data, released by Crisil Intelligence's Quarterly Update of Indian Performance (QUIP), is based on an analysis of over 600 companies across 47 sectors. The report shows that weak performance in sectors such as power, coal, steel, and IT services has dragged down overall topline momentum.
Sector struggles
IT services sector faced major challenges during the quarter
The IT services sector faced major challenges during the quarter, with profit margins falling by 100 basis points to around 21%. This was due to delayed project execution and uncertainty over US tariffs. The absence of favorable forex gains that had supported margins last year also contributed to this decline. The impact of these factors was significant on overall profitability for the quarter, given the sector's large share in India's services exports.
Sector performance
Pharmaceuticals, telecom services sectors showed healthy revenue growth
Despite the slowdown in some major sectors, select industries such as pharmaceuticals, telecom services, aluminium, organized retail, and airlines showed healthy revenue growth. The FMCG sector posted a volume growth of 4-5%, supported by easing food inflation and a favorable monsoon forecast. Rural markets outperformed urban centers in consumption metrics during this period.
Future prospects
Crisil optimistic about full-year outlook
Despite the subdued performance in Q1, Crisil remains optimistic about the full-year outlook. The agency expects a revenue growth of 7-8% for India Inc in FY26, driven by strong contributions from FMCG, airlines, organized retail, and two-wheelers. It also anticipates EBITDA margins to expand by about 50 basis points for the year due to stable commodity prices and productivity gains.