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India Inc. is set to report a 6-8 percent slowdown in revenue growth in the April-June period, making it the fourth straight quarter of decline in the headline figure, ratings agency arm Crisel said Tuesday.
However, from a profitability perspective, India is set to post an increase in margins to 20 percent from 19.6 percent in the same period last year, due to weaker commodity prices, Crisil Market Intelligence and Analytics said in a note. .
She said moderation in revenue growth would be on the back of lower achievers and higher base.
It said revenue growth will be two percentage points lower than that observed in the previous January-March quarter, adding that this will be the first time in eight quarters that listed companies will show a consecutive decline in revenue growth.
After analyzing 300 companies from 47 sectors, excluding financial services and oil and gas, the report said that 14 sectors are likely to witness a decline in revenues, while 15 sectors recorded slower growth in the previous quarter.
She said that the decline in achievements and the slowdown in global demand for metals and industrial commodities affected aluminum, steel, iron alloys and petrochemical industries.
She added that aluminum manufacturers’ revenues likely declined by 14-16 percent due to an 18-20 percent decline in international prices and moderate growth in volumes, adding that steel products may have recorded a 6-8 percent contraction in revenues in the higher base. to the previous budget and a decline in deliverables, which offset volume growth.
It added that the energy sector is likely to witness a relatively slower 5 percent growth in revenues.
“Of the total ancillary revenue year-on-year during the first quarter, approximately 60 per cent would have been contributed by just three segments – investment-related, export-related products and services and consumer appreciation,” said its director Aniket Dhani. The majority of this increase was attributed to the automotive and cement sectors.
Danny added that the export-related sectors are expected to ride out the decline largely on the back of healthy growth in IT services and pharmaceuticals.
Assistant manager Sahel Bhatt said a 33 percent drop in crude oil in the first quarter would help profit margins.
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