Indian companies are set for an 8% revenue boost this financial year, fueled by robust domestic consumption and steady government spending on infrastructure projects. That’s the key takeaway from a fresh Crisil report released Tuesday, highlighting why corporate India’s outlook looks promising.
Somasekhar Vemuri, a senior director at Crisil Ratings, points out that overall corporate credit quality remains strong, with earnings before interest, taxes, depreciation, and amortization (EBITDA) holding steady at about 12%. Factors like simplified goods and services tax (GST) rates, income tax cuts, cooling inflation, and lower borrowing costs are all sparking more spending at home. Meanwhile, consistent government capital expenditure (capex) and solid local demand are keeping credit profiles solid in infrastructure and consumer-driven sectors.
Vemuri adds that companies’ balance sheets are in great shape, with debt levels at decade-lows. This gives them flexibility to handle any global economic storms. Export-heavy industries might feel the pinch from worldwide slowdowns, but better trade deals—think pacts with big players like the US and European Union—plus more homegrown policies could soften the blow.
Banks and non-banking financial companies (NBFCs) also have a stable credit outlook for the year. Expect credit growth to accelerate in the second half, thanks to falling interest rates, policy rate cuts, and upbeat consumption from GST tweaks and tax relief. Bank lending should rise 11-12%, a bit more than last year, while non-banks’ assets under management (AUM) could match the healthy 18% growth from the previous fiscal.
The report shines a light on bright spots across sectors. Construction firms are thriving with diverse order books in roads, water supply, irrigation, and power. Infrastructure areas like renewable energy, road projects, commercial real estate, and data centers enjoy reliable cash flows that bolster their prospects.
Hospitality is riding high on surging leisure and business travel, where demand is outstripping supply. Fast-moving consumer goods (FMCG) companies, too, are in for gains from steady demand, thanks to easing inflation, tax breaks, and profits juiced by premium products.
Not everything’s smooth, though. US tariffs are hitting export-linked sectors hard, since America buys 20% of India’s merchandise exports. In the diamond industry, profits could shrink as tariffs worsen demand woes and competition heats up from cheaper lab-grown stones. Shrimp exporters face revenue dips from fiercer rivalry, even after a rush of orders in the first half of the year.
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