US-Iran war to drag India Inc's profit by 20%
What's the story
India's corporate earnings for the quarter ending March 2026 are likely to take a hit due to the war between US-Israel and Iran. The geopolitical tensions have led to a spike in crude oil prices, affecting various energy and crude-dependent sectors. Analysts expect that around 40 companies could witness a profit contraction of over 20% YoY in their upcoming quarterly results.
Sector impact
Oil and gas sector hit hardest
The oil and gas sector has been hit the hardest by the surge in crude prices. Companies in this space are directly exposed to volatile crude prices and refining margins. Indraprastha Gas's profit is expected to decline 45.1% YoY, while Petronet LNG's net profit is likely to fall 23.8% YoY due to rising LNG import costs amid soaring global gas prices. HPCL's profit is also projected to drop by a whopping 31%.
Sector woes
Auto and defense sectors also under pressure
The auto sector has been grappling with rising input costs, high steel prices, and weakening demand sentiment in the wake of geopolitical tensions. Hyundai Motor India is likely to witness a major profit contraction of 26.7% YoY—the steepest among major auto OEMs. Hindustan Aeronautics Ltd's (HAL) profit is also expected to fall by 32.9% YoY despite a strong order book due to execution delays and higher input costs that have compressed margins.
Additional firms
Other companies likely to witness profit contraction
Other companies that may witness a profit contraction of over 20% YoY include Birla Corporation, JK Lakshmi Cement, Alkyl Amines, Clean Science, Deepak Nitrite, Havells, Cyient DLM, Biocon and Blue Jet Healthcare. The list also includes Cipla, Dr Reddy's Laboratories, Zydus Lifesciences, KNR Constructions, Zee Entertainment, Hindalco Industries, Jindal Steel & Power, GAIL (India) Limited, Sunteck Realty Limited, Sapphire Foods India Limited Tata Communications, ACME Solar, JSW Energy, Tata Power, and IDFC First Bank, among others.
Earnings outlook
Overall earnings picture for Q4FY26 remains healthy
Despite the challenges posed by the Israel-US-Iran conflict, the overall earnings picture for Q4FY26 remains healthy. The NBFC-lending sector is likely to be a star performer with 30% YoY earnings growth—the highest in 10 quarters. The metals sector is also expected to report strong earnings growth of 27% YoY. Private banks are projected to grow 12% YoY while technology and consumer sectors are expected to contribute double-digit growth.