According to Icra data, the aggregate revenue of a sample of 838 public companies increased by 22% in the June quarter. This figure exceeds the 13% year-on-year growth recorded in March, indicating the resilience of India's corporate sector, which is compensating for weakness in the oil sector.
Nevertheless, the aggregate operating margin (OPM) decreased by more than 200 basis points in the first quarter of 2026-27, while net profit remained relatively stable. The main reason for this was the impact of the refining sector, where high crude oil prices and lost revenues from LPG and petroleum products negatively affected profitability.
Icra reported that when excluding the oil and gas sector, the OPM remained stable at 19%, and net profit grew by more than 20% year-on-year. In a statement by the domestic rating agency, it was noted that the review of results announced so far shows that India started 2026-27 in a stronger position than expected.
This growth is driven by inflation caused by commodity and precious metal prices, sustained demand due to the reduction in GST rates last year, which stimulated the automotive sector, as well as stable consumption volumes despite the escalating situation in West Asia and concerns about El Niño.
Icra's sample of 838 companies does not include the financial sector or companies with annual revenues less than 50 crore rupees. Icra noted that the IT services sector performed weakly, as growth in constant currencies remained moderate. Slowdown in growth was also observed in domestic cyclical industries such as cement and sugar, as well as in export-oriented companies, such as the textile and auto component industries.
Jitin Makar, Senior Vice President and Head of Corporate Ratings Group at Icra, stated that although there were initial concerns about demand and cost shocks at the beginning of the quarter, the actual impact was limited. Sectors focused on consumption were among the key drivers of growth.
Makar added that while Original Equipment Manufacturers (OEMs) recorded the strongest revenue growth, other consumer sectors also demonstrated healthy performance, including FMCG, durable consumer goods, apparel, food retail, jewelry retail, and fast-food restaurants.
In the future, key factors to monitor remain the resumption of geopolitical tensions in West Asia, related volatility in crude oil and commodity prices, and the uncertain global trade environment. Nevertheless, Makar emphasized that the strong balance sheets and comfortable credit profiles of Indian corporations provide significant protection against potential income volatility and short-term external shocks.
