ICRA Warns Q1 Earnings Shock: Iran War, El Niño & Crude Oil May Hit Margins

India Inc may face a challenging start to the financial year as ICRA warns that rising crude oil prices, rupee depreciation, and concerns around El Niño could impact corporate earnings in Q1. According to the ratings agency, operating margins may decline by 100–150 basis points, putting pressure on profitability across several sectors.

Aviation, hotels, ceramics, and other crude-sensitive industries are expected to feel the impact the most, while rural demand could weaken if El Niño affects agricultural output. Sharing his market outlook, Avinash Gorakshakar, Founder of Avinash Mentor Research, said that Q1 earnings are likely to remain soft, though investors may see signs of recovery from Q2 onwards. He added that markets have already priced in some of the near-term weakness and are looking ahead to a more stable second quarter.