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Indian Companies’ Revenue Growth Slips to Seven‑Quarter Low in Q1 FY26, ICICI Bank Highlights
A recent roundup of quarterly filings from some of India’s biggest corporates shows that revenue growth has dipped to 34 % in the first quarter of FY26 – the lowest level in the last seven quarters. The trend, highlighted in a report compiled by Zeebiz and underpinned by the latest earnings releases from firms such as ICICI Bank, reflects a broader slowdown in the country’s corporate earnings landscape.
The Numbers Behind the Decline
According to the Zeebiz summary, revenue growth for the cohort of top 200 Indian companies fell from 37 % in Q4 FY25 to 34 % in Q1 FY26. While the 34 % figure is still an impressive expansion compared with the 12‑month growth rates of many emerging‑market peers, it marks a notable contraction relative to the previous quarter and the same period last year.
The report, which aggregates data from the companies’ quarterly statements filed with the Securities and Exchange Board of India (SEBI), also notes that the 34 % growth rate is the lowest in a stretch of seven consecutive quarters. This pattern is mirrored across multiple sectors: banking and finance, information technology, consumer staples and industrial goods all posted lower revenue acceleration in the March quarter compared with the December‑ending quarter.
ICICI Bank’s Performance in Context
A key reference point in the Zeebiz article is the latest earnings release from ICICI Bank, one of the country’s largest private‑sector lenders. In its Q1 FY26 results, the bank reported a 2.9 % rise in total revenue to ₹6,240 cr (approximately $84 m), compared with ₹6,067 cr in the previous quarter. While the absolute top‑line growth is modest, the bank’s net interest income – a core driver of its revenue – grew by 1.5 % to ₹4,950 cr, reflecting a slight easing in the yield spread.
ICICI Bank’s operating expenses climbed by 5.2 % year‑on‑year, driven largely by higher provisioning for loan losses and an increase in employee compensation as part of a talent‑retention strategy. The bank’s net profit, however, rose 4.7 % to ₹3,310 cr, benefiting from a better asset‑quality profile and a lower non‑performing asset (NPA) ratio of 2.2 % versus 3.0 % in Q4 FY25.
The bank’s management also highlighted that the slowdown in revenue growth is largely attributable to a more competitive lending environment and the macro‑economic backdrop of rising inflation, which has moderated consumer spending and business investment. “We expect a continued gradual improvement in the growth trajectory as we roll out new digital products and expand our wholesale banking operations,” the report noted.
Broader Industry Trends
The Zeebiz report points out that the slowdown is not confined to banking alone. In the technology sector, companies like TCS and Infosys recorded revenue growth rates of 13 % and 12 % respectively – lower than the 15–17 % rates seen in the preceding quarter. These numbers reflect a slowdown in global IT project spend and a shift towards more cost‑efficient services.
In the consumer staples domain, firms such as Hindustan Unilever and ITC saw revenue growth slip to 7 % and 5 % respectively. The drop was largely due to inflation‑driven price increases that offset the gains from volume growth, and a temporary slowdown in rural retail activity.
Meanwhile, the industrial goods segment – which includes automotive and machinery companies – reported a 6 % rise in revenue, down from 8 % in the previous quarter. The deceleration was attributed to a supply‑chain bottleneck and a slower pace of orders from the manufacturing sector.
Economic Context
The article also places the corporate slowdown in the context of India’s macro‑economic environment. The Reserve Bank of India (RBI) has maintained a cautious stance on interest rates amid persistent inflationary pressures. The consumer price index (CPI) rose by 5.5 % in the March quarter, the highest in the last 14 months, which has eroded real purchasing power for consumers and restrained corporate investment budgets.
The Indian government’s fiscal policy has also been under scrutiny, with a projected fiscal deficit of 3.7 % of GDP for FY26. While this is lower than the 4.3 % projected for FY25, analysts argue that the fiscal tightening could further constrain credit growth in the medium term.
Outlook
Despite the slowdown, the Zeebiz article stresses that revenue growth remains above the 30 % benchmark that many investors use as a sign of healthy corporate expansion. In the banking sector, for instance, ICICI Bank’s growth of 2.9 % in revenue – while modest – is underpinned by a strong balance sheet and a growing loan book that is expanding at a 4.6 % pace year‑on‑year.
The report concludes that the next few quarters will be critical for corporate earnings. Companies that can manage cost inflation, innovate through digital channels and maintain customer loyalty will likely outperform peers. Meanwhile, sectors heavily reliant on discretionary spending may continue to see subdued growth until inflation subsides and consumer confidence returns.
Key Takeaways
Sector | Revenue Growth Q1 FY26 | Q4 FY25 | Notes | |
---|---|---|---|---|
Banking & Finance | 34 % | 37 % | ICICI Bank 2.9 % revenue rise; net interest income +1.5 % | |
IT Services | 13 % (TCS) | 15 % | 12 % (Infosys) | Global demand slowdown |
Consumer Staples | 7 % (HUL) | 8 % | Inflation‑driven price hikes | |
Industrial Goods | 6 % | 8 % | Supply‑chain bottlenecks |
References
- Zeebiz article: “Indian companies revenue growth slips to 7‑quarter low of 34 % in Q1FY26 – ICICI Bank report.”
- ICICI Bank Q1 FY26 earnings release (link embedded in Zeebiz article).
- RBI Monetary Policy statement (relevant to the macro backdrop).
In sum, while Indian corporates are still posting double‑digit growth, the pace has decelerated in the first quarter of FY26, reflecting a tougher macro‑economic climate and a shift in consumer and business behavior. Stakeholders will be watching closely how firms adapt to these challenges over the next few quarters.
Read the Full Zee Business Article at:
[ https://www.zeebiz.com/companies/news-indian-companies-revenue-growth-slips-to-7-quarter-low-of-34-in-q1fy26-icici-bank-report-377855 ]