One paint company just predicted a ‘double digit’ quarter: what’s really driving India Inc’s Q1 boom

‘We will have double digit value growth in Q1,’ said Abhijit Roy, managing director at Berger Paints, previewing what is shaping up to be a strong quarter for large sections of India Inc. Roy said he expects an even stronger second and third quarter, building on a weak year-ago period when excessive rainfall and an early Diwali had shortened the festive selling season.

His comment lines up with a broader estimate from ratings agency Crisil, which expects overall corporate revenue to grow 11-11.5% in the April-June quarter of FY27. Sehul Bhatt, director-research at Crisil, said the growth this quarter is coming mainly from pricing rather than sales volume — a reversal of the pattern seen over the past two years.

The earnings season has been gathering pace through July, with Reliance Industries reporting on Friday and HDFC Bank, ICICI Bank and Kotak Mahindra Bank following on Saturday. Crisil said profits have grown consistently across companies reporting so far, even as some missed analyst estimates. Automobiles, white goods, telecom, power generation, steel and healthcare all drew support from resilient domestic demand, with intense summer heat lifting demand for air conditioners after a rain-hit year earlier.

Building materials group Nuvoco Vistas Corp posted a 7% rise in operating profit to Rs 572 crore in the quarter, its highest-ever first-quarter figure, which managing director Jayakumar Krishnaswamy credited to cost discipline and operational efficiencies. FMCG revenue is estimated to grow 6-7% on price increases, with Axis Securities expecting Nestle India, CCL Products and Varun Beverages to outperform peers, even as higher packaging, logistics and food-related costs weighed on profitability.

Not every number tells the same story. Construction revenue is estimated to rise just 1-3% as geopolitical disruptions delayed project execution, and airlines are estimated to see operating profit margin fall by around 1,000 basis points as aviation turbine fuel costs rose while passenger traffic softened. IT services revenue is estimated to grow only 5%, driven largely by favourable currency movements rather than fresh enterprise spending — TCS’s profit rose about 5% to Rs 13,349 crore this quarter, while Wipro’s stayed flat at Rs 3,356 crore.

Crisil expects corporate operating profit margin overall to contract 75-100 basis points year-on-year, and flagged the monsoon’s effect on rural demand and food inflation, along with the West Asia conflict’s effect on energy prices, as the key swing factors ahead — warning that margin pressure could deepen further in the second quarter if the West Asia uncertainty persists.

Wikimedia Commons/by Appaiah