India’s Economic Growth, Easing Cost Pressure To Boost Corporate Profit, Fitch Says

India likely to be among the world’s fastest-growing sovereigns, with resilient GDP growth of 6.5% in FY25

Indian corporates’ profit is expected to rise in the financial year ending March 2025 (FY25), supported by robust economic growth and easing input cost pressure, according to Fitch Ratings.

India’s robust economic growth will boost demand for corporates despite weakness from slowing growth in key overseas markets, Fitch said in a statement.

This, and easing input cost pressure, should boost profits in FY25 by 290 basis points above FY23 levels, helping corporates maintain adequate rating headroom despite higher capital expenditure, it added.

Fitch said India is likely to be among the world’s fastest-growing sovereigns, with resilient gross domestic product growth of 6.5% in FY25 (FY24F: 6.9%).

The rating agency noted that India’s structural demand visibility, supply-side reform by the government and healthier corporate and bank balance sheets will enable a further increase in capital expenditure across most sectors following an uptick in FY23.


Fitch said demand will remain strong for cement, electricity and petroleum products, with high frequency data in 2023 sustained at well above pre-Covid-19 pandemic levels.

India’s rising infrastructure spend will also boost steel demand, Fitch said. It added that car sales will continue to rise despite its expectation of moderation after a robust growth in 2023.

Fitch noted that slowing demand in the US and Eurozone is likely to moderate sales growth for IT services, but a corresponding easing of employee attrition and wage pressure should underpin higher profitability and solid rating headroom at rated IT services companies.

Rising demand will help maintain industry balance in cement and steel sectors despite a faster pace of new capacity additions, it said.

Fitch said refining margins at oil marketing companies are likely to stay above mid-cycle levels in the near term, while lower crude oil prices after FY23 should support marketing profitability.

The rating agency also said that margins at India’s top-two telecommunication companies will continue to benefit from ongoing industry consolidation.

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