India Inc holds steady in Q3, but margin pressure mounts: Crisil Intelligence

Corporate revenue is expected to have grown 6-7% year-over-year in the December quarter, similar to the previous quarter, according to Crisil Intelligence’s analysis of ~600 companies that account for more than half of the market capitalisation of the National Stock Exchange.  

Four sectors – automobiles, cement, pharmaceuticals and aluminium – which account for more than 20% of the revenue of the companies analysed, are expected to have lifted the overall numbers.

The automobile sector likely saw revenue rise 13%, driven by strong growth in passenger vehicles (PV), two-wheelers, commercial vehicles (CV) and tractors. PV revenue likely rose 26%, driven by an expected 22% increase in domestic volume because of price rationalisation brought about by a reduction in the goods and services tax along with deferred replacement demand from the second quarter, which propped volumes in the third quarter.
Revenue of the cement sector likely climbed up 9%, riding on an expected increase of 8% in volume driven by post-monsoon recovery and demand pick-up after the festive season.

The pharmaceutical sector likely increased its revenue 9% on healthy exports and stable domestic demand.
For the aluminium sector, revenue is expected to have risen 8%, primarily because of a 12% price hike, even as demand was impacted by lower export volume following the levy of higher tariffs by the US.

On the other hand, four sectors—information technology (IT) services, steel, power and construction—which together account for more than a third of the revenue, are expected to have dragged on growth.

Says Pushan Sharma, Director, Crisil Intelligence, “Revenue of the IT services sector is expected to have grown just 3%, primarily because of manufacturing-related projects amid an air of caution stemming from lingering global uncertainties. Revenue for the power sector is also seen up ~3%, as renewable energy capacity additions lowered demand for coal-based electricity. For the steel sector, revenue growth was likely limited to 2% amid weak selling prices and slack domestic demand. That effect was exacerbated as the safeguard duty was not levied in November and December. The construction sector likely slipped 2% amid slowing central allocations to infrastructure.”

Earnings before interest, tax, depreciation and amortisation (Ebitda) of the companies analysed is expected to have increased ~3% on-year.

Ebitda margin, however, may have contracted 50-100 basis points (bps), pulled down by key sectors such as automobiles, steel, construction and IT.

Says Elizabeth Master, Associate Director, Crisil Intelligence, “Four of the top 10 sectors—automobile, steel, construction, and IT—are likely to post margin declines. The automobile sector may have seen a 50-100 bps on-year slippage, reflecting the lagged impact of higher aluminium prices, which rose 11% on-year in the previous quarter. For the steel sector, it is seen down 40-60 bps due to higher cost of inputs such as iron ore and coking coal. The construction sector may have logged a 20-40 bps decrease because of lower revenue and higher operational expenses. The IT sector also likely logged a slightly lower margin because of higher employee cost resulting from changes in labour laws as companies provided for higher statutory employee benefits, mainly gratuity and leave encashment.”

The other six sectors likely clocked margin expansion. Aluminium may have seen a significant 130-150 bps improvement due to a substantial decline in alumina costs, which more than halved in the third quarter of fiscal 2026. The telecom services segment is expected to have dialled up 100-120 bps gains, driven by growth in home broadband, higher average revenue per user from quality customers, capital expenditure efficiency and ongoing cost discipline. The cement sector likely saw 80-100 bps expansion, supported by stable costs.