Iran-Israel War: Crude oil price crossing $110 per barrel and increasing tension in Iran are affecting the Indian economy as well as India Inc. This is no less than an alert. businessmen from this year 2026The dream of double-digit growth in corporate earnings for -27 may be reduced to single digits. Companies have started announcing their results for the fourth quarter of FY26.
Fear of huge cut in earnings
IT sector giant Tata Consultancy Services (TCS) will also declare its results on April 9. The quarter from which India Inc. It was expected that the path of recovery would be paved, but at the same time, the hopes of profit in all the sectors seem to be dashed.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, warns, “If crude oil prices remain high and restrictions on gas availability continue, then another round of earnings cuts is certain to come.” “Earnings will be cut in those sectors which are more import dependent and related to crude oil.”
What is India Inc.?
India Inc. It is a term used for the corporate sector of the country. Apart from the government, big business houses like Reliance, Adani and Tata also include companies listed in the stock market. They contribute about 60 percent to the nominal GDP of the country. This includes sectors related to manufacturing, trading, business services and construction.
India Inc. alarm bells for
- If the price of crude oil increases, it will have a bad impact on the paint, lubricants, plastic and chemical industries. Due to increase in the price of crude oil, the cost of production of these products based on it will increase. This will reduce the operating margins of companies because the burden of increased input costs is not passed on to customers immediately.
- If oil becomes expensive, expenditure on transportation and logistics will increase. This will increase all-round inflation. If inflation increases, people’s spending capacity will reduce. This will reduce demand in sectors like FMCG and auto.
- Experts believe that if oil prices remain at $ 110 for a long time, then India’s GDP may fall below 6 percent, which was earlier estimated to remain above 7 percent.
- If the war continues for a longer period, the earnings of the companies included in Nifty-50 may fall by up to 4 percent.
Which sectors will be affected the most?
The increase in crude oil prices will have the biggest impact on those sectors which are basically energy-based. Vijayakumar explains, “Industries that use petroleum inputs like paints, adhesives and tires will be affected. Manufacturers who use LNG as fuel in the manufacturing of products like vitrified tiles have suffered huge losses.”
He further says that the maximum intensity of this impact will be felt in the first quarter (Q1) of FY27 instead of Q4. Santosh Meena, head of research at Swastika Investmart, says, “The most affected sectors are those that are energy intensive—such as fertilizers, chemicals, ceramics, paints, glass and tyres, which are facing huge pressure on margins due to acute shortage of LPG/LNG, plant closures and sudden increase in input costs. The auto and aviation sectors are similarly struggling with production disruptions and rising fuel prices, which are directly reducing profits and reducing customer demand.
IT services are expected to have a slow end to the financial year as orders are being delayed due to global uncertainty. Apart from these, oil marketing companies, logistics and export-intensive sectors like gems and jewelery are also facing a widespread slowdown. In contrast, the upstream and defense sectors remain relatively strong.
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