India Inc's Q1FY26 Revenue Growth Slows to 4–6% Amid Weakness in Power, IT and Steel: Crisil Intelligence

New Delhi, July 28 — Cirisil Intelligence has estimated the total revenue growth for India Inc in the first quarter of FY26 to be in the moderate range (4-6%), revised down from nearly 7% in each of the previous two quarters. The slowdown is attributed to lower-than-average performance in core sectors, including power, IT services, and steel. These three sectors account for one-third of the revenue of over 600 companies analysed in the report.

Key Drags on Growth: Power, IT and Steel

According to the report, the power sector’s revenue is projected to decline by 8% YoY, largely due to reduced electricity demand caused by a cooler summer. This also impacted coal demand, which is estimated to have dropped 2–3% YoY, as spot power prices weakened.

The IT services sector experienced flat revenue growth amid global geopolitical tensions and tariff-related uncertainty, resulting in project delays and slower activity.

The steel sector recorded muted growth of 1–3% YoY, impacted by maintenance shutdowns and a 2–4% decline in prices, further weighing down overall corporate performance.

Sectors Driving Growth

Despite the overall moderation, five sectors emerged as key drivers of revenue growth in Q1:

• Pharmaceuticals: Revenue rose 9–11% YoY, marking the highest growth among all sectors, supported by robust exports and stable domestic demand.
• Telecom Services: Estimated to grow 12% YoY, led by 11% higher realisations from more expensive subscription plans.
• Organised Retail: Revenue jumped 15–17% YoY, particularly in the value fashion and food & grocery segments.
• Aluminium: Posted 23% YoY growth, supported by domestic demand from power transmission, rising exports, and improved realisation from downstream products.
• Airlines: Revenue climbed 15% YoY, driven by a 10–12% increase in passenger volume, as fewer aircraft were grounded and new planes were added.

Other Notable Sectoral Trends

• Auto: Revenue rose 4% YoY, aided by higher retail sales and pricing support from richer product mix and stronger exports, though inventory overhang posed a headwind.
• Construction: Up 6% YoY, helped by a low base effect from last year’s election-related disruptions, despite limited new budget allocations.
• Cement: Saw volume-led growth of 3–4%, benefiting from pre-monsoon construction activity and a low base, though some plants faced temporary shutdowns.
• FMCG: Volume increased 4–5% YoY, aided by rural demand recovery.
• Steel, Cement, and FMCG: Growth in these sectors was largely driven by volume increases of 7–9%, 3–4%, and 4–5%, respectively.

Outlook

Crisil Intelligence highlighted that geopolitical tensions and the early onset of the monsoon significantly influenced Q1 sector performance. While a few high-growth sectors provided support, broader weakness in core industries, such as power and IT, held back overall momentum.

As India Inc navigates evolving global dynamics and domestic demand fluctuations, revenue trends across sectors are expected to remain mixed in the near term.

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