Corporate Revenues Grow B 9.2 Pc in Q2FY26

Chennai: Corporate India recorded the highest quarterly growth in revenue at 9.2 per cent in Q2FY26, driven by improved demand across consumption and infrastructure-oriented sectors. Revenue growth is expected to grow by 8-10 per cent in Q3FY26 due to festive season demand momentum and GST rate reductions.

Against 5.6 per cent growth in the previous quarter and 5.1 per cent growth in the same quarter last year, Q2FY26 recorded a growth of 9.6 per cent growth in corporate revenues, according to ICRA.

The revenue growth was supported by consumption-led sectors like retail, hotels, and auto, and infrastructure-oriented sectors like capital goods and cement. Consumption sector growth was supported by rising premiumisation and the continuing value shift towards organised players, while infrastructure sector benefited from the high capital expenditure spending by the government.

Revenues are set to grow by 8-10 per cent in Q3 FY26 supported by healthy rural demand. GST rate rejig, income tax relief announced during the Union Budget 2025, 100 bps interest rate cut between February 2025 and November 2025, leading to lower borrowing costs and easing food inflation offer support, acting as tailwinds to reviving urban spending. Meanwhile, geopolitical tensions and the steep US tariffs continue to weigh on export-oriented sectors, including agro-chemicals, textiles, auto components, cut and polished diamonds, and IT services.

Corporate India also reported 140 basis points improvement in operating profit margin to 16.1 per cent in Q2FY26. Margin expansion in sectors like cement, oil and gas, telecom and power was partly offset by a margin contraction in sectors like retail, construction, and airlines. The OPM is likely to improve by 50-100 bps in Q3 FY2026, supported by resilient rural demand, revenue growth spurred by festive season demand momentum and GST rate reductions, alongside the easing of input costs such as crude oil and coal.

The OPM is likely to improve by 50-100 bps in Q3 FY2026, supported by resilient rural demand, revenue growth and easing of input costs such as crude oil and coal.

Meanwhile, debt levels were at an all-time high in Q2, driven by debt-funded capex across sectors such as industrial, capital goods, power and construction. Oil and gas and telecom reported decline in debt levels backed by strong cash flow generation. Expected normalisation of debt levels along with expansion in OPM will result in an improvement in credit metrics over the near term.