Savanam Chandra Sekhar 03 01 This study investigates the financial implications of carbon pricing exposure for Indian firms focusing on accountingbased and marketbased performance indicators Using firmlevel data from the ORBIS database for the period 20102023 we examine the relationship between carbon exposure proxied by industry carbon intensity and energy cost shares and firm profitability Return on Assets market valuation Tobins Q and stock market valuation Employing fixedeffects panel regressions with robust standard errors we find that carbonintensive firms experience significantly lower profitability and market valuation while noncarbonintensive firms remain largely unaffected The negative effects are more pronounced for marketbased measures indicating that investors actively price carbonrelated regulatory and transition risks Heterogeneity analyses confirm that the financial burden of carbon pricing is concentrated in carbonintensive sectors suggesting a reallocation rather than uniform decline in firm value The results remain robust to alternative performance measures lagged exposure and industry exclusions The findings highlight the importance of predictable carbon pricing pathways credible carbon disclosure and proactive lowcarbon investment strategies for corporate managers By providing the first largescale firmlevel evidence from India this study extends the literature on carbon pricing and financial performance in emerging economies and offers insights for policymakers and investors navigating the lowcarbon transition Copyright (c) Journal of Science Engineering Technology and Management Science. All rights reserved 2026