Fitch Ratings has forecasted that India’s stable GDP growth, improved banking sector health, and anticipated interest-rate reductions in 2025 will enhance credit access for corporates in FY26. Despite elevated capital expenditures, Indian corporates are expected to see stronger credit metrics and higher EBITDA margins. However, challenges such as rising energy prices, geopolitical uncertainties, rupee depreciation, and trade restrictions could potentially impact exports.
Fitch estimates that sales growth for rated corporates will remain modest at 1-2% in FY26, down from 1.5% in FY25, largely due to lower oil and gas prices, which will particularly impact upstream and refining companies. Meanwhile, other sectors are expected to exhibit varied performance.
India’s GDP is projected to grow by 6.5%, with infrastructure investments fueling demand for cement, steel, electricity, petroleum, and engineering and construction sectors. Although oil marketing companies may face declining sales due to price reductions, moderate volume growth is anticipated. IT services firms may see mid-single-digit growth as clients tighten discretionary spending, while auto suppliers could face challenges from weaker exports and slower domestic demand.
Recovery in travel and tourism is expected to progress at a moderate pace, while the telecom and pharmaceutical sectors are likely to thrive due to tariff hikes and consistent non-discretionary demand. These factors highlight a mixed but promising outlook for India’s corporate credit landscape in FY26.
