Business · Economy · 12 hrs ago
India’s services firms expect demand to stay positive, but margin concerns remain
India’s services firms expect demand to remain positive in the third quarter of financial year 2026-27, according to a Reserve Bank of India survey.
Their optimism is lower than it was in the previous quarter.
In the second quarter, firms reported better business conditions, turnover and full-time employment, but also faced higher cost pressures.
They expect costs to ease moderately, while confidence in selling prices and profit margins remains relatively low.
The survey says firms remain optimistic about the outlook through the first quarter of financial year 2027-28, although input costs are expected to persist and selling prices are expected to stay stable.
The RBI also found that services firms could provide 8.7% more services in the first quarter of 2026-27 using their existing resources.
These expectations matter because costs and selling prices can affect firms’ profit margins as demand continues.
India’s services firms expect demand to remain positive in Q3FY27, according to the Reserve Bank of India’s latest survey.
Their optimism has moderated from the previous quarter, while concerns about selling prices and profit margins persist.
In Q2FY27, services firms reported improved business conditions, turnover and full-time employment, alongside increased cost pressures.
Firms expect cost pressures to ease moderately, but anticipate input costs will remain a concern in later quarters.
Services firms said they could deliver 8.7 per cent more services in Q1FY27 with existing resources.
- Who
- Indian services sector firms surveyed by the Reserve Bank of India.
- What
- Firms expect positive demand, but optimism has moderated and concerns about selling prices and profit margins remain.
- When
- The outlook covers Q3FY27 and later quarters; the survey also reports conditions in Q2FY27.
- Where
- India.
- Why
- Not stated
This story does not have two clearly opposing sides.
Cost pressures are expected to ease moderately,
Firms expressed relatively lower optimism regarding selling prices and profit margins.
Services firms reported improved business conditions, turnover and full-time employment, but also increased cost pressures.
Firms expected demand to remain positive, with optimism moderated from the previous quarter.
Firms indicated they could deliver 8.7 per cent more services using existing resources.
The RBI said firms’ outlook remained optimistic, while input cost pressures were likely to persist and selling prices were expected to remain stable.
- Survey
- RBI Services and Infrastructure Outlook Survey
- Demand outlook
- Positive for Q3FY27
- Business optimism
- Moderated compared with the previous quarter
- Service capacity
- 8.7 per cent more services using existing resources in Q1FY27
- Future outlook
- Optimistic through Q1:2027-28
Sources
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