Corporate India’s first-quarter earnings outlook appears optimistic, notwithstanding the conflict in West Asia. From banking and auto to consumer goods, most sectors are expected to report decent numbers, thanks to domestic demand that held up reasonably well. According to Crisil, India Inc’s overall revenue is projected to grow at a two-year high of up to 11.5 percent during the April-June quarter, a period that faced volatile oil prices, severe supply chain disruptions and higher inflation. The analytics firm also noted that growth may not be uniform across sectors, but broad-based enough to hold up the aggregate.
The auto sector has reasons to be more optimistic than others about the first quarter of 2026-27. Owing to GST rate cuts, the sector reported robust sales of passenger vehicles, commercial fleet and two-wheelers. Likewise, sales of consumer durables and fast-moving goods stayed healthy because of the resilience of private consumption. However, the IT sector, which is facing headwinds due to subdued investments in artificial intelligence, is expected to post single-digit growth, that too partly helped by a weaker currency. For instance, market leader TCS’s constant-currency revenue grew barely 0.4 percent in the first quarter, though it was hopeful of better second half of the year. On the other hand, a credit growth of 17 percent—with acceleration near the end of the quarter—with healthy deposits and advances data augur well for the banking sector, especially for private banks.
The robust earnings outlook in spite of uncertainty over the West Asia war means the economy has fared better than was earlier expected. If the macro headwinds are indeed behind us, as a section of the market expects, with crude oil prices staying closer to the pre-war levels, the earnings momentum and overall growth should pick up from the second quarter. That said, it is important to note that the pass-through of higher prices often comes with a lag. Given that fuel price hikes in India began in May, and have not been rolled back yet despite a significant correction in global crude prices, higher input prices will persist and will be felt sharper in the second quarter. Lastly, oil prices remain volatile with an upside risk and deficient rainfall poses a threat to rural demand and food prices. The sum of it means that India Inc’s second-quarter profitability needs a close calibration.
