India Inc's revenue growth to hit 2-year high of 11-11.5% in Q1 despite Iran war: Crisil

India Inc’s revenue is estimated to have grown 11–11.5% year-on-year in the quarter ended June 30, 2026, the fastest pace in eight quarters and the highest in two years, according to Crisil Intelligence. This compares with 9.6% revenue growth in the preceding March quarter, underscoring the resilience of corporate India in the face of supply disruptions and rising input costs triggered by the West Asia conflict.

Crisil’s analysis covers more than 400 companies across 47 sectors, excluding banking, financial services and oil and gas, representing nearly half of India’s listed market capitalisation. The agency notes that while uncertainties around crude oil and gas affected fuel, freight, packaging and feedstock costs, domestic demand “held up reasonably well”, allowing many companies to pass higher costs on to end-consumers.

Pricing power replaces volume as growth engine


For much of the past two years, revenue growth across India Inc was largely volume-driven, but the latest quarter marks a shift towards pricing-led gains. “For much of the past two years, revenue growth was powered largely by volume. But this time around, pricing was the primary driver, contributing more to revenue growth than volume in sectors such as aluminium, steel, cement, airlines, fertilisers and gems and jewellery,” said Sehul Bhatt, Director, Crisil Intelligence.

Bhatt added that growth “was not uniform, but it was broad-based enough to prop up the aggregate number,” highlighting how improved realisations in metals, cement, chemicals, tyres, fertilisers and parts of the consumer basket offset weaker sectors. Aluminium producers, for instance, benefited from supply disruptions and firmer global prices, with primary aluminium revenue estimated to have surged 51–53% year-on-year, supported by lower import availability, higher regional premiums and capacity additions.

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Domestic-demand sectors stay resilient

Automobiles, white goods, telecom services, power generation and parts of healthcare remained supported by healthy domestic demand, even as global headwinds intensified. Automobiles were among the strongest contributors to aggregate growth, with sector revenue estimated to have risen 22–24% year-on-year, aided by goods and services tax rationalisation, robust passenger vehicle and two-wheeler sales, steady commercial vehicle demand, export growth and selective price increases.

Power generation stayed relatively insulated from external disruptions, with revenue expected to have grown 8–10%, driven by an estimated 8% increase in peak power demand. Telecom services revenue is projected to have increased 10–11%, supported by premiumisation, data monetisation, migration to postpaid plans and subscriber upgrades. Fast-moving consumer goods revenue is estimated to have grown 6–7% year-on-year, aided by selective price hikes, though higher packaging, logistics and food-related costs are likely to have weighed on margins.

Export-oriented sectors feel the pinch

In contrast, export-linked segments such as textiles, pharmaceuticals and processed food encountered headwinds from higher freight rates and longer shipping schedules amid global supply chain disruptions. Pharmaceuticals fared relatively better than most export-oriented sectors, with revenue estimated to have grown around 12% year-on-year, supported by domestic demand, new product launches and exports to semi-regulated markets.

However, even in pharmaceuticals, profitability came under pressure due to rising raw material, power and logistics costs, alongside pricing challenges in the US market. IT services revenue grew by about 5%, largely driven by favourable currency movements, as global enterprises remained cautious about spending. Construction activity lagged despite healthy order books, with sector revenue estimated to have increased only 1–3% year-on-year as geopolitical disruptions slowed project execution and delayed revenue recognition. Cement companies managed to offset part of their cost pressures through price hikes, recording an estimated 6–8% revenue growth.

Margin squeeze despite revenue surge

Despite the strong top-line performance, profitability across India Inc was subdued, as companies were able to pass through only part of the cost escalation. Crisil estimates that aggregate earnings before interest, taxes, depreciation and amortisation (Ebitda) margins contracted by 75–100 basis points year-on-year in the June quarter. “Margin pressure was most pronounced in sectors where pre-escalation inventory cushions gradually depleted. As replacement costs rose, companies started absorbing higher expenses on industrial diesel, commercial liquefied petroleum gas, freight, packaging and feedstock,” said Pushan Sharma, Director, Crisil Intelligence.

“The pressure was particularly acute in sectors where pricing power was limited, demand sensitivity was high, or cost escalation was sudden,” Sharma added, pointing to airlines, chemicals, petrochemicals, pharmaceuticals, tyres, cement, fertilisers and packaging as among the most affected. Airlines, for instance, faced aviation turbine fuel-led cost escalation even as passenger traffic softened, resulting in an estimated ~1,000 basis points decline in Ebitda margin. Tyre makers saw a 200–300 basis points margin squeeze due to sharp increases in natural rubber, carbon black and synthetic rubber costs.

Looking ahead, Crisil Intelligence believes three key factors will shape the trajectory of corporate performance: the extent of further price increases and their impact on demand, the ability of companies to protect volumes while recovering higher costs, and the pace at which pressures in fuel, freight, feedstock and packaging begin to normalise. The evolution of the southwest monsoon will also be critical, given its implications for rural demand and food inflation, which in turn influence consumption-led sectors.

“For sectors with significant exposure to these cost drivers, margin recovery will depend on both the stability of replacement costs and the ability to pass on higher expenses without impairing demand,” Crisil noted. Higher-cost inventory already in the system could keep replacement costs elevated and trigger another round of margin pressure before profitability begins to fully normalise. With uncertainties in West Asia “ebbing and rising, and energy prices reacting accordingly,” Crisil cautioned that geopolitical developments will remain a key variable for Indian corporates in the quarters ahead.

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