India Inc sees 2 per cent growth in Q3

DECCAN CHRONICLE | DECCAN CHRONICLE
Published Jan 6, 2016, 12:52 am IST
Updated Mar 26, 2019, 11:50 am IST
Representational image
 Representational image
MumbaiCorporate India’s performance during the quarter ended December 2015 is expected to remain subdued as a slump in commodity prices and weak performance of investment linked sectors are likely to curb revenue and profitability growth.
 
According to rating agency Crisil Research, India Inc’s revenue growth is expected to be a tepid two per cent, marking the sixth consecutive quarter of single digit top line growth. With growth rates still trending below estimates, the rating agency believes that the consensus earnings estimates for both this fiscal and next will have to be pared further.  
 
A rapid slide in global commodity prices will hurt the topline growth of steel, petrochemicals, and commodity chemical producers. The pressure on realisation and sales volume in both domestic and overseas operations will lead to an 18 per cent decline in revenue of the Indian steel industry.
 
On the other hand, the revenue growth of the petrochemicals industry is expected to decline 13 per cent given a drop in crude oil prices. Though the public investments have started to gain traction, the rating agency noted that it is yet to reflect in the performance of investment linked sectors. 
 
This is mainly attributable to weak demand in end-user sectors such as real estate and overcapacity in several others. Consequently, Crisil believes that the growth in the construction and capital goods sectors will remain sluggish. 
 
Export-linked sectors will be the only bright spot in terms of topline growth. While the revenue of pharmaceutical sector is expected to grow by 13 per cent, IT revenue growth is seen in the range of 10 per cent thanks to a spurt in volume and benefits from rupee depreciation. 
 
“With lower input costs and intense competition, pricing has also been impacted. This is evident across a range of sectors like airlines, FMCG, textiles, cement (except south India), and IT services,” said Prasad Koparkar, senior director, Crisil Research.

 

 

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