Chennai: Indian companies reported 3.7 per cent growth in aggregate revenues along with margin expansion in the December quarter.
The aggregate revenues of 579 listed companies evaluated by ICRA expanded by 3.7% on a YoY basis during Q3 FY24. However, the softening of input costs, especially raw material prices, curtailed the revenue expansion for most of the sectors.
However, this softening of input costs along with operating leverage benefits helped the companies witness an expansion of operating profit margin by 171 bps to 17.2 per cent. Nevertheless, input costs remain elevated over historic levels, and as a result, India Inc.'s OPM could not reach the levels of 18-19 per cent witnessed during FY2022.
Though debt levels of companies are different across sectors, they remained largely stable in the quarter owing to the improvement in earnings and recovery of demand. There has been no sharp increase in debt/margin levels in the first half of the year. ICRA expects India Inc. to report stable credit metrics, going forward, despite expectations of some debt addition to support growth.
However, the evolution of the global economic scenario would remain a key monitorable over the near term. According to ICRA, India Inc.’s performance in Q4 FY2024 is expected to remain stable. However, the uncertainties in the global economic environment, ongoing geopolitical developments, weakness in rural demand, and a potential slowdown in government capex in the run-up to the general elections are potential headwinds. Accordingly, India Inc.’s ability to navigate these challenges remains critical.
