Corporate India’s revenue is likely to grow at 5-6 per cent in the first quarter (April-June) of fiscal 2020, the slowest pace in two years, in the wake of a broad-based slowdown in consumption, which has affected sectors such as automobiles and fast-moving consumer goods (FMCG), rating agency Crisil has said.
According to Crisil, this compares with an average revenue growth of 14-15 per cent in the past four quarters. The estimate is based on Crisil Research’s analysis of 295 companies, which account for 60 per cent of the market capitalisation of the National Stock Exchange. The analysis excludes banking, financial services and insurance (BFSI) and oil sectors.
Miren Lodha, Director, CRISIL Research, said, “automobiles, one of the key sectors driven by consumption spending, continues to reel under a demand slowdown.
Higher cost of ownership continues to dampen consumer sentiment for passenger vehicles, while commercial vehicle sales are being impacted by new axle norms, inventory build-up and liquidity crunch. This also impacts ancillary sectors such as auto components and tyres, which are expected to report lower growth.”
As for FMCG, weakened rural consumption and a high base are expected to cause a moderation in growth.” Adding to the pain from a slowdown in consumption is a fall in realisations in key commodity categories, which supported revenue growth in fiscal 2019, especially the first half, Crisil said.