Archive · 9 Oct 2026
Q2FY27 Growth Holds Firm as Rising Costs Test Margins
Anand Rathi expects many companies to keep growing in Q2FY27.
It says car and other vehicle businesses may do especially well.
Banks are lending more, and their loan quality is expected to stay steady.
Big technology companies may grow a little faster than last quarter, but the report does not see this as a strong return in customer demand.
Some businesses are paying more for materials and transport.
Those higher costs could reduce how much money companies keep from sales.
Some sectors may still grow even while their profit margins face pressure.
Anand Rathi expects corporate growth momentum to continue in Q2FY27 despite uncertainty from the West Asia crisis.
Automobile revenue is forecast to rise 27% year-on-year, with sequential EBITDA margins potentially improving by 20 basis points.
Bank credit growth accelerated to about 19%, while net interest margins and asset quality are expected to remain broadly stable.
The top six IT companies are expected to post median sequential constant-currency growth of about 1.1%, seen as seasonal rather than a demand recovery.
Input, commodity and freight cost pressures could weigh on margins in several sectors, including chemicals, cement, FMCG and retail.
- Who
- Anand Rathi Research assessed expected performance across several sectors and companies.
- What
- Its Q2FY27 earnings preview forecasts continuing growth alongside pressure on profitability from elevated costs.
- When
- Q2FY27.
- Where
- The report discusses Indian companies and sectors; it was datelined Mumbai.
- Why
- Growth is expected to be supported by factors including automobile activity and faster lending, while higher input and other costs may pressure margins.
Growth-supporting factors
Margin and demand risks
Automobiles
Growth-supporting factors
Higher production, premiumisation, price increases and scale benefits support a 27% revenue growth forecast and could lift sequential EBITDA margins.
Margin and demand risks
Commodity inflation could absorb some of the gains from pricing and scale.
Specialty chemicals
Growth-supporting factors
Firmer pricing, feedstock cost pass-through and recovering volumes could support strong year-on-year growth.
Margin and demand risks
Sequential margins may weaken as inventory gains reverse and input and freight costs rise.
Information technology
Growth-supporting factors
The top six companies are expected to improve sequential constant-currency growth to about 1.1%, from about 0.35% in Q1FY27.
Margin and demand risks
Anand Rathi describes the improvement as seasonal rather than a demand revival; margins are expected to remain broadly flat.
- Automobile revenue forecast
- 27% year-on-year growth
- Automobile EBITDA margins
- Could improve 20 basis points sequentially
- Bank credit growth
- Accelerated to approximately 19%
- IT growth forecast
- Top six IT companies: median sequential constant-currency growth of around 1.1%
- IT comparison
- The corresponding figure for Q1FY27 was approximately 0.35%
- Expected IT margins
- Broadly flat, with rupee depreciation offering limited relief against wage increases, acquisition amortisation and AI spending
- Sectors flagged for margin pressure
- Chemicals, cement, FMCG, consumer durables, paints, apparel and footwear retail