India Inc quarter net may remain flat

DECCAN CHRONICLE | DECCAN CHRONICLE
Published Oct 8, 2015, 6:38 am IST
Updated Mar 27, 2019, 1:51 pm IST
Crisil Research
 Crisil Research
MumbaiIndia’s Inc’s September quarter earnings growth is expected to remain flat, marking the fifth consecutive quarter of single digit growth, rating agency Crisil Research said on Wednesday. 
 
According to it, the fragile consumption demand especially in the rural areas, weakness in investment-linked sectors, and the meltdown in global commodity prices will more than offset the healthy top-line growth expected in the export-oriented sectors. The Ebidta growth are expected to be just two per cent.
 
However, revenue growth is expected to improve in the second half of the current fiscal following a mild uptick in consumption, increased government spending, and the statistical low-base effect (revenue growth was 3 per cent in the second half of last fiscal). Despite this, revenue and earnings growth for the entire fiscal is likely to remain in single digits and well below consensus estimates, Crisil said. 
 
“Export-linked sectors will be the only bright spot in terms of top-line. Though merchandise exports have been declining for several months now, listed exporters (primarily the IT and pharma sectors) are expected to grow at around 13 per cent in the September quarter, helped partly by the seven per cent depreciation in the rupee,” said Prasad Koparkar, senior director, Crisil Research. 
 
Domestic consumption-driven sectors with high dependence on rural consumption, however, will be impacted by tardy growth in rural income. In contrast, urban-focused sectors such as multiplexes, retail, and telecom are projected to post healthy double-digit top-line growth. 
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