India Inc to see tepid revenue growth of 4-6% in Q1 FY26 as IT, steel drag earnings: Crisil 

The strong performance was on the back of higher volumes in sectors like airlines—which is expected to have grown by 10–12%; steel—which is expected to have grown by 7–9%, compared to a price rise of 3–5%, and a fall of 2–4% respectively. The report also identifies that rural growth has seen recovery, driven by growth in the FMCG and tractors sectors. Some of the other contributors to the rebound in rural growth include moderating food inflation, a favourable monsoon forecast, and a good rabi harvest.

However, one of the major sectors responsible for the overall tepid revenue growth was IT services, whose profitability, according to Crisil, has likely declined by 100 basis points year-on-year to about 21%. The profitability was affected by geopolitical uncertainties, primarily driven by U.S. tariffs, which led to a deferral of IT spending on projects. This likely led to slower activity in the sector, which contributes 14% to the mix of companies that Crisil analysed. The sudden plunge in demand and project deferrals, induced by U.S. tariffs and the absence of currency-related gains, has also hit Ebitda margins.

In the large-cap IT space, Infosys is the only outlier, which reported a sequential and year-on-year increase of 2.6% and a year-on-year growth of 3.8%. Peers such as TCS, Wipro, and TechM experienced a decline in their constant currency revenue during the quarter, both sequentially and year-over-year. HCLTech, however, saw a sequential revenue decline of 0.8% in constant currency terms, but it was up 3.7% compared to the first quarter of the previous fiscal year.