Fitch Sees 9% Revenue Growth for Indian Corporates in FY27 Amid Oil Price Risks

Fitch Ratings projects that Indian corporates' aggregate revenue will rise by 9% in FY27, driven by higher prices for natural resources and robust demand for petroleum products, steel, power generation, transmission, cement, and other building materials. This growth is expected to be supported by a 6.4% GDP growth rate in FY27.

The credit metrics of Indian companies are likely to remain stable due to accelerating revenue growth offset by cost pressure and lower EBITDA margins in some sectors. However, Fitch warns that risks include oil price increases and the El Nino phenomenon, which could cut wind generation at renewable companies and dampen crop protection demand.

The US-Iran conflict and its potential impact on oil prices is also a concern for Fitch, as it could lead to fuel marketing losses and higher working capital needs at oil refining and marketing companies. This could pressure free cash flow and negatively affect credit metrics.