India Inc expects 12.8% growth in revenue: Study

India Inc, which is on an upward trend. is expected to print a 12-quarter high of 12.8 per cent for the first quarter of financial year 2018-19, according to Crisil Research.

The projection, which is based on analysis of 350 companies that account for 50 per cent of the market capitalisation of the National Stock Exchange, excludes two major sectors — BFSI and oil firms — while calculating the jump in growth. This, however, would be the third consecutive quarter of double-digit growth.

“While the earlier two quarters had benefited from low-base effect following demonetisation in the corresponding yearago period, this quarter will reaffirm a sustained pickup in demand in most consumption-linked sectors,” the agency said.

“The performance would be in line with our estimate of double-digit growth for the whole of fiscal 2019, with 15 of the 21 key sectors expected to log growth above 10 per cent this time,” said Prasad Koparkar, senior director, Crisil Research.

“The pick-up in volumes is expected to have sustained in both consumption-and commoditylinked sectors.”

Among consumption driven sectors, automobiles, retail and airline services are expected to log revenue growth in excess of 15 per cent, led by volumes, said Crisil.

Among commoditylinked sectors, natural gas and cement are expected to post robust growth, led by volumes, while the likes of petrochemicals and steel products would benefit from continued higher prices, it said.

“Export-linked sectors such as IT and pharma, too, are expected to show an uptick, thanks to a 4 per cent depreciation in the rupee over the quarter,” it said.

However, telecom is expected to show the impact of continued pricing pressure, which has forced incumbents to slash tariffs to retain subscriber market shares.

The toplines of sugar players, too, are expected to show the impact of bumper production on sugar prices.

“Despite the firm revenue trend, operating profitability, or the earnings before interest, tax, depreciation and amortisation (EBITDA) margin, is expected to print 20 basis points (bps) lower on-year at 18.9 per cent. The pace of margin contraction, though, is seen easing to less than 30 bps on-year from 100-250 bps in the previous four quarters, aided by improvement in operating efficiency and utilisation,” said Crisil.

“Sectors such as automobiles, steel products, and pharmaceuticals are expected to log improvement in EBITDA margin,” said Hetal Gandhi, director, Crisil Research.

AMONG CONSUMPTION DRIVEN sectors, automobiles, retail and airline services are expected to log revenue growth in excess of 15%, led by volumes, Crisil Research said in its projections.