New Delhi, June 16
India Inc’s operating profit margins are expected to increase by 10 to 40 basis points to 18.2-18.5 per cent in Q1 (April-June) of FY2026, following the sequential recovery over the past few quarters, according to a report released by rating agency ICRA on Monday.
“This, coupled with a moderation in interest costs, owing to the RBI’s recent repo rate cuts aggregating to 100 basis points bps, will result in an improvement in the interest coverage ratio for India Inc. to around 5.1-5.2 times in Q1 FY2026, against 5.0 times in Q4 FY2025,” the report states.
Kinjal Shah, senior vice president at ICRA, said, “Given the uncertain global environment, the private capital expenditure (capex) cycle is expected to remain measured. However, certain sunrise sectors such as electronics, semiconductors and niche segments within the automotive space like electric vehicles will continue to see a scale-up in investments, in line with the various production-linked incentives programmes announced by the Government of India.”
“Further, entities linked with the Indian Railways and Defence sectors would also see their large order books translating into revenues and earnings,” he added.