Fitch Ratings Projects 9% Revenue Growth for Indian Corporates

Recent projections from Fitch Ratings indicate that aggregate revenue for rated Indian corporates will rise by 9% in the financial year ending March 2027, an increase from the 5% estimate for FY26. This growth is expected to stem from higher prices in the natural resources sector and robust demand for steel, petroleum products, cement, and engineering and construction, supported by infrastructure spending and a projected 6.4% GDP growth.

Despite the revenue increase, the agency forecasts that the aggregate EBITDA margin will narrow to approximately 14.2%, down from 15.7% in FY26. This compression is attributed to cost inflation within the chemicals, cement, and oil refining and marketing sectors. Fitch Ratings expects median EBITDA net leverage to remain steady at 2.7x in FY27.

The agency identified several risks that could jeopardize this outlook. Potential catalysts for instability include a re-escalation of hostilities between the US and Iran, which could increase energy costs and pressure working capital. Additionally, weather-related disruptions from El Nino and a weak monsoon are cited as threats to rural income and renewable energy generation.