MUMBAI: As businesses begin disclosing their financials, India Inc. is likely to report a halving of revenue growth in the fourth quarter of FY23, a credit rating agency warned on Thursday.
According to Crisil’s Market Information and Analytics division, the revenue growth will drop to 10–12% from 22.8–% for the January–March period last year.
According to the report, revenue is predicted to have increased by 19–21% for the entire fiscal year FY23, which is less than the above 27% growth seen in FY22. The operating margin is also predicted to have slowed by 3 percentage points.
According to Crisil, which examined 300 firms across 47 sectors to determine its estimates, the key factors contributing to the dramatic deceleration in topline growth for Q4FY23 are the high base and the ongoing export challenges that have had an influence on volume growth.
According to the report, sales from export-focused industries and commodities like textiles, gems and jewellery, and information technology-enabled services decreased year over year.
Steel goods, which make up about 11% of the set’s income, are predicted to have had a 7-9% year-over-year revenue decline during the March quarter as a result of the application of an export charge in May 2022 and a decline in worldwide demand due to higher input costs.
Similar to that, it stated that the aluminium industry should have seen a 17–19% decline in income due to weak worldwide demand.
Ankit Dani, the company’s director of research, said that while demand for consumer staples like pharmaceuticals and fast-moving consumer goods (FMCG) continued to grow, consumer discretionary products like airlines, hotels, media and entertainment, and retail were the main drivers of revenue growth.
According to the report, hotel revenue is predicted to increase by 98%, airline revenue by 67%, and telecommunications revenue by 13%.
Operating profit margin is predicted to have increased slightly for the second consecutive quarter, from 19% in the quarter ending in December 2022 to 19-20% in the quarter ending in March 2023, according to the agency.
According to its associate director Sehul Bhatt, “prices of key energy-related commodities such as crude oil and non-coking coal look to have come off their previous highs and will partially counterbalance the impact of weaker global demand.”
According to the report, corporations’ profitability is anticipated to increase this fiscal year as volumes drive revenue growth and commodity prices decline.
