In­dia Inc Won’t be Proud of this Q4

Crisil re­port ex­pects cor­po­rate EBITDA to rise by 7% due to higher gross mar­gins but rev­enue growth to stay at around 2%

The Economic Times - - Commodities Plus - Joel.Re­bello@ times­group.com

Mum­bai: In­dian com­pa­nies could record the fastest growth in earn­ings be­fore in­ter­est, taxes, de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA) in six quar­ters in the quar­ter ended March 2016 but rev­enue growth will con­tinue to lag due to weak in­vest­ment de­mand, patchy re­cov­ery and in­tense com­pe­ti­tion, said Crisil Re­search, an arm of rat­ing agency Crisil.

Crisil re­search ex­pects cor­po­rate EBITDA to in­crease by around 7% in the quar­ter to March, driven by higher gross mar­gins be­cause of lower com­mod­ity prices. How­ever, rev­enue growth will lan­guish at around 2%. The re­search com­pany an­a­lysed 600 com­pa­nies that ac­count for 70% of mar­ket cap­i­tal­i­sa­tion of the Na­tional Stock Ex­change.

Mon­soon re­mains cru­cial for cor­po­rate rev­enue in the fis­cal year end­ing March 2017, Crisil said, though not in dou­ble dig­its.

“Net profit growth is ex­pected to ac­cel­er­ate and be in the range of 12-15% ow­ing to higher to­pline growth, im­prove­ment in EBITDA mar­gin, sub­dued work­ing cap­i­tal re­quire­ment and lower in­ter­est cost,” Crisil said. Crisil ex­pects au­to­mo­biles, con­sumer goods, pharmaceuticals, ce­ment and or- gan­ised re­tail to out­per­form in fis­cal 2017 with a re­duc­tion in im­ports and a pick-up in global de­mand help­ing large steel play­ers. “The mod­est im­prove­ment in per­for­mance in the March 2016 quar­ter would be driven by a hand­ful of sec­tors. In­for­ma­tion tech­nol­ogy ser­vice providers are likely to post around 14% ru­pee rev­enue growth, driven by vol­ume growth and 8% de­pre­ci­a­tion in the ru­pee against the dol­lar,” Prasad Koparkar, se­nior di­rec­tor at Crisil Re­search, was quoted in the re­port. Koparkar also ex­pects auto com­pa­nies to do well in the quar­ter ended March driven by strong do­mes­tic sales.

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