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Informist, Tuesday, Jan. 20, 2026

 

MUMBAI – Betting on stronger revenue and wider earnings before interest, tax, depreciation, and amortisation margins offsetting the higher capital expenditure intensity of Indian corporate under Fitch Ratings' watch, the rating agency expects the credit metrics to be stable for 2026-27 (Apr-Mar). Sharp depreciation of rupee and imposition of additional tariffs by the US are the downside risks to this forecast, especially for the exposed issuers.

Potential additional tariffs, if sustained at levels significantly higher than in other Asian markets, could weigh on economic growth, affecting the operating performance of more Indian companies. The steel and chemicals sectors will face pricing pressure if US tariffs divert supply to other markets, including India, the rating agency said.

 

Aggregate revenue of Fitch-rated companies is seen rising by 6% in FY27 as against a fall of 1% seen in FY26, driven by steady growth in GDP and an improved consumer-spending outlook owing to a comprehensive reduction in goods and services tax. Fitch recently revised India's GDP growth forecast for FY26 to 7.4% from 6.9%, and expects annual growth of 6.4% and 6.2% over FY27 and FY28, respectively. The rating agency expects aggregate EBITDA margins for Fitch-rated corporates in FY27 to improve to around 16%, slightly better than 15.3% estimated for FY26.

 

A deteriorating outlook for global automotive demand will weigh on revenue growth of automobile suppliers despite the GST cuts boosting domestic demand. The demand recovery in the travel and tourism industry will continue, albeit at a moderate pace, the rating agency said. Revenue for oil and gas production and oil refining and marketing companies, should rise by mid-single digits in FY27 on volume growth and steady prices after a decline in FY26. Chemical companies benefit from improving domestic and global demand, which is seen translating to higher revenue growth, the rating agency said.

 

Fitch also expects metals and mining to see strong volume growth, especially in steel, and prices are seen steady or increasing. Subdued spending amid uncertain global economic conditions will limit the information technology sector's growth to low to mid-single digits. A rise in average revenue per user and robust data consumption will boost telecom sector, it said. Pharmaceutical sector companies will likely stay resilient despite US pricing pressure, aided by steady growth in other markets, the rating agency added.

 

Reported by Gopika Balasubramanium

Edited by Deepshikha Bhardwaj

 

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