India Inc Revenue Likely Grew Up To 16.5% In Q2 FY27, EBITDA Margins Stable At 18.2–18.6% Says Crisil

New Delhi, Oct 8: India's corporate revenue is estimated to have grown a strong 16–16.5 per cent year-on-year in the second quarter of FY27, with aggregate EBITDA margins broadly stable at 18.2–18.6 per cent even as input costs weighed on some sectors, a report said.

Sequential growth in absolute terms is likely to be marginally higher, underscoring the impact of higher input costs on bottom lines, the report from Crisil Intelligence said, adding that:

Domestic demand supports revenue growth

The corporate revenue had grown 17.4 per cent in the first quarter. Domestic demand likely remained supportive, with automobiles, power, metals and consumer staples emerging as the largest contributors to growth. Firmer commodity realisations and favourable currency translation effects also likely supported revenue expansion in select export-oriented sectors.

Commodity producers appear to have benefited from stronger realisations, while several downstream and consumer-facing sectors likely absorbed part of the increase in input costs to protect demand and sustain volume growth.

The analysis covered over 800 companies across 65 sectors, excluding banking, financial services and oil and gas.

Automobiles, power and metals drive growth

“Among sectors, automobiles and power were likely supported by domestic demand and volume growth, while metals appear to have benefited more from stronger realisations and favourable supply-side dynamics," said Sehul Bhatt, Director, Crisil Intelligence.

"Reported growth in IT services was also likely aided materially by currency depreciation. Meanwhile, elevated energy and raw material costs appear to have made cost recovery more challenging for downstream sectors,” Bhatt added.

Consequently, the broadly stable aggregate margin likely masks a widening divergence between commodity producers and commodity users.

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Passenger vehicle revenue sees strong growth

Automobiles likely remained among the largest contributors to overall revenue growth, the report noted.

Passenger vehicle revenue likely rose nearly 24 per cent, supported by an expected 20 per cent growth in volumes, premiumisation and better product mix. The sector likely continued to benefit from demand momentum following the goods and services tax rate rationalisation, although that tailwind appears to have largely played out by the end of the quarter.

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