India Inc revenue growth in Q4FY23 halves to 10-12%: crisis

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India Inc is likely to report a halving of revenue growth in the fourth quarter of FY23, a credit rating agency said Thursday, as companies begin to report their financials. Sales growth will fall to 10-12 percent from 22.8 percent for the period January-March last year. crisissaid the Market Intelligence and Analytics Department.

For the full fiscal year FY23, sales are estimated to have grown by 19-21 percent, which is slower than the growth of more than 27 percent recorded in FY22, it said, adding that operating margin likely declined by 3 percentage points.

Continued export headwinds, which have impacted volume growth, and high bases were cited as the top reasons that will drive the sharp slowdown in revenue growth for Q4FY23, Crisil, who analyzed 300 companies across 47 industries to target the meet expectations , said .

It said revenues from commodities and export-oriented sectors such as textiles, gems and jewelry, and information technology-based services were down year on year.

Steel products, which account for about 11 percent of the set’s sales, are estimated to have seen a 7-9 percent annualized sales decline in the March quarter due to the imposition of an export duty in May 2022 and weakness in the global demand amid higher input costs.

Similarly, subdued global demand is expected to have led to a 17-19 percent drop in sales for the aluminum industry, it said.

Sustainable consumer products such as airlines, hotelsmedia and entertainment and retail led to sales growth, while demand for consumer staples such as pharmaceuticals and fast-moving consumer goods (FMCG) continued its growth momentum, research director Ankit Dani said.

Hotel revenues are expected to grow 98 percent, airlines 67 percent and telcos 13 percent.

In terms of profitability, the operating profit margin is estimated to have improved slightly for the second consecutive quarter — from 19 percent in the December 2022 quarter to 19-20 percent in the March 2023 quarter, the agency said.

“Prices of key energy-related commodities, such as crude oil and non-coking coal, appear to have come off their previous highs and will partially offset the impact of lower global demand,” said the deputy director. Sehul Bhatt said.

Companies are likely to see their profitability improve during this fiscal year as commodity prices fall and volumes drive revenue growth, the company said.

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