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Rating agency ICRA has said that it expects sequential revenue growth for India Inc in the December quarter, led by improved rural demand and uptick in government spending, additionally supported by the festival season. However, it said headwinds such as uneven urban demand and evolving global uncertainties could weigh on growth in the second half of the fiscal.

Further, it expects the operating profit margin (OPM) for India Inc to improve in the coming quarters. As a result, the credit metrics of India Inc in the October-December period of FY25 are estimated to improve with the interest coverage ratio in the range of 4.5-5 times, against 4.1 times in Q2 FY25.

Kinjal Shah, Senior Vice President and Co-Group Head -- Corporate Ratings, ICRA -- said while corporate India witnessed a muted sequential revenue growth in Q2 FY2025, led by the ongoing slowdown in urban demand, lower government spending amid monsoon-related disruptions, the same is expected to improve in the upcoming quarters. 

Shah added this would be supported by continued growth in consumption-oriented sectors like FMCG, retail as well as improved revenues in commodity-oriented sectors like iron and steel and cement, among others, led by uptick in government capex spending as well as increased rural demand.