Crisil stress test reveals sectors facing risk, and those less affected

Rating agency Crisil has warned that a prolonged West Asia conflict could significantly squeeze India Inc’s profitability in FY27, even as strong balance sheets are expected to cushion broader credit risks. In a stress test covering 34 sectors — accounting for nearly 65 per cent of its rated corporate debt portfolio — Crisil estimated that extended supply-chain disruptions and elevated crude oil prices could shave nearly 200 basis points off corporate operating profitability from pre-conflict expectations.

 

Based on the assumption that disruptions will persist for nine months in FY27 and crude oil averages $110 per barrel, Crisil states 22 of the 34 sectors stress-tested could see operating profitability decline by over 10 per cent as companies may not be able to fully pass on higher costs to consumers immediately.