Indian companies are likely to clock 7-8% revenue growth during the March quarter of the current fiscal year, domestic rating agency ICRA said on Monday. It highlighted that the growth will be led by revival in rural demand and uptick in government spending.

The private capital expenditure cycle to remain measured in view of the uncertainties around geopolitical developments and relatively subdued outlook on merchandise exports from India, it said.

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ICRA said the recovery in the operating profit margins (OPM) for India Inc witnessed over the past quarter is likely to be sustained at 18.2-18.4%, supported by an increase in demand, led by improved consumer sentiments.

Certain sunrise sectors such as electronics, semiconductors and niche segments within the automotive space like electric vehicles (EVs) will continue to see a scale-up in investments, in line with various production-linked incentive programmes announced by the Government of India, it said.

“Rural demand is expected to be upbeat in H1 CY2025 (January-March), aided by the robust output for most kharif crops and the favourable outlook for the ongoing rabi season. Beyond that, a normal and well distributed monsoon in 2025 is crucial to support the agricultural outcomes,” said Kinjal Shah, Senior Vice President & Co-Group Head, Corporate Ratings, ICRA.

In its report, ICRA analysed Q3 FY2025 performance of 602 listed companies, excluding financial sector entities, and said they show a 6.8% year-on-year revenue growth.

The growth was supported by improved demand across consumption-oriented sectors like consumer durables, FMCG, retail, hotels and airlines, while a few commodity-oriented sectors like iron and steel witnessed some decline, following lower realisations owing to weak global demand and influx of cheaper imports from China.