New Delhi, May 25 -- A prolonged West Asia conflict could cut corporate operating profitability by around 200 basis points this fiscal, Crisil Ratings said in a research report. However, it noted that strong balance sheets, steady domestic demand and government capex should keep India Inc's credit quality resilient.

The ratings agency said the outlook remains "stable but cautious," with only eight sectors--10 per cent of rated corporate debt--likely to see a material impact on credit profiles. The agency warned that supply-chain disruptions lasting nine months and crude averaging $110 per barrel would pressure margins more than topline growth.

"The protracted conflict in West Asia has been goading domestic companies to realign supply ch...