Nuvama has cautioned that rupee depreciation and high prices that lifted Indian exporters' revenue in the April-June quarter will begin to fade in H2FY27, according to an Economic Times report on the brokerage's Q1FY27 Earnings Review.
Export revenue growth accelerated to 15%
According to the report, export-oriented sectors recorded a sharp acceleration in revenue growth during the quarter. Nuvama said top-line growth for exporters rose to 15 per cent year-on-year in Q1FY27, up from 6 per cent in FY26. The brokerage attributed the acceleration mainly to prices and the depreciation of the Indian rupee. The report said exporters posted strong revenue growth during the April-June quarter, supported by the rupee's depreciation and higher prices amid supply disruptions.
| Indicator | Q1FY27 | FY26 |
|---|---|---|
| Exporters' top-line growth (year-on-year) | 15% | 6% |
Sector divergence: chemicals strong, pharma weak
Nuvama said chemical companies reported a strong quarter, while pharmaceutical companies recorded relatively weak earnings. A weaker rupee and the stabilisation of supply disruptions could continue to provide some support to exporters, the brokerage said.
IT sector and currency risk
Currency movements remain an important risk for sectors with significant overseas revenues, according to Nuvama. In the IT sector, the report said healthy deal bookings and stable FY27 guidance indicated stability in the demand environment, although decision-making cycles remained extended. The brokerage added that "a key risk is any adverse currency movement" and said a sharp appreciation of the rupee against the US dollar and other currencies could negatively affect financial performance in the sector.
Fading tailwinds from H2FY27
In its Q1FY27 Earnings Review, Nuvama said:
INR depreciation along with high prices owing to supply shock have supported the top line. Some of these tailwinds will start to fade in H2FY27.
The moderation in currency and price benefits is part of a broader risk the brokerage sees emerging in the second half of the financial year. Nuvama said factors including rupee depreciation, GST cuts, a low base and higher metal prices, which supported corporate revenue growth over recent quarters, are expected to begin fading from H2FY27.
For trade professionals, the report's emphasis on price and currency effects rather than demand growth suggests the recent acceleration in exporter revenue may not be durable once those factors ease. In the IT sector, extended decision-making cycles could continue to temper revenue gains, even as stable guidance points to a steady demand environment.
Related trade disputes
The Economic Times article also carried two related items: India has sought WTO consultations with the US over a duty on quartz surface products, and separately over a 50% tariff quota on quartz surface imports. No additional details were provided in the report.
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