India Inc is set to report a decline in both revenue as well as profit growth numbers in the December quarter, says a report.
Revenue growth will dip by up to 5 percentage points on average to 12-13 percent, domestic ratings agency CRISIL said in a report on January 7 and attributed the estimate mainly to a high base in general and also due to certain sector-specific issues.
Auto companies will post a revenue growth of only 4 per cent on rise in ownership costs and weaker finance options which have crimped sales during the quarter, while the same for the FMCG sector will be 8 percent on sluggish rural demand, it said, adding sugar, aluminium, and telecom will face pressure from lower realisations.
Operating profit growth will decline to 10 percent, a sharp decline from 15 percent growth levels achieved in the preceding three quarters, the report said.
Commodity-linked sectors will see a jump in revenue growth, led by natural gas (37 per cent), steel products (27 per cent), cement (10 per cent), while infrastructure-related sectors like construction are expected to clip at 12 per cent.
The rupee was weaker by 11 per cent during the quarter, which will benefit export-linked sectors such as software and pharma, which are estimated to grow by 21 per cent and 10 per cent, respectively, it said.
“Commodity and infrastructure-linked sectors are expected to support revenue for the December quarter,” said Prasad Koparkar, a senior director at CRISIL.
In consumption spending-led sectors such as airlines and retail, revenue will be supported by positive demand sentiment, while in export-oriented segments such as software services and pharma, the boost would come from a weak rupee, he said.
