Under the full glare of the Middle East conflict, India Inc’s performance paints an optimistic picture despite relatively flat earnings growth. Of the 4,220 companies that had reported results till Friday, revenue and PAT grew 21 per cent and 14 per cent YoY, respectively.This indicates strong revenue growth that has not fully translated into the bottom line owing to higher material costs. The divergence is more pronounced when the 593 BFSI companies are excluded, with revenue and adjusted PAT growth at 24 per cent and 8 per cent, respectively.However, excluding another 48 companies from the refinery, power and gas distribution sectors that faced significant oil and gas marketing losses, revenue and PAT growth for the remaining companies improves to a more balanced 22 per cent each. For this group, despite gross margins declining 333 basis points YoY, EBITDA margins declined by a lower 110 basis points, as higher business volumes absorbed the impact of increased material costs.Raw material cost inflation is expected to be transient, with many sectors indicating a normalisation during July-August. This should support higher earnings in the remainder of FY27, provided revenue growth sustains.