New Delhi, June 26 -- The sharp correction in crude oil prices to pre-war levels could significantly reduce the impact on India Inc.'s profitability this fiscal, with the hit now expected to be nearly half of the earlier stress-case estimate, even as geopolitical risks remain, Crisil Ratings said in its latest report.

According to Crisil Ratings, it had initially assessed 34 sectors exposed to the West Asia conflict and estimated that operating margins could decline by up to 200 basis points to around 12% this fiscal year under a prolonged conflict scenario involving the closure of the Strait of Hormuz.

However, with the Strait of Hormuz reopening following a tentative US-Iran memorandum of understanding (MoU), Crisil Ratings believes t...