India Inc revenue growth likely moderated to 5.4% in March quarter: Crisil

The moderation, though, follows stronger growth in previous years and is, hence, on a higher base. Among the 47 sectors monitored by Crisil, only 12 are expected to have clocked an improvement in revenue growth both sequentially and on-year for the quarter. The analysis of is based on 350 companies (excluding financial services and oil and gas sectors), it said.

Crisil said consumer discretionary products and services likely led the show in the quarter. Among discretionary products, the automobiles sector was steered by healthy growth in passenger vehicles on the back of higher volumes and price hikes in the past year.

The organised retail sector grew for the thirteenth quarter in a row, on healthy urban demand. Discretionary services, such as airlines and hotels benefited from MICE1, weddings and corporate travel segments rebounding, it said.

“At the other end, revenue from construction-linked sectors likely grew at a tepid pace, essentially on account of a high base of the fourth quarter of fiscal 2023 that saw construction companies achieving their highest quarterly revenue,” Crisil said. In the cement sector, despite steady demand momentum during the quarter, revenue growth remained moderate as prices were under pressure amid higher supply and intense competition, the rating firm said.

“Even with slower revenue growth in March Quarter, corporate revenue is estimated to have grown 8 per cent in fiscal 2024. In fiscal 2025, revenue growth should improve to 9-10 per cent, driven by sectors less dependent on commodities and largely catering to the domestic market,” said Miren Lodha, Senior Director, CRISIL MI&A Research.

Consumer discretionary segments, comprising both goods and services, will grow despite easing of the post-pandemic release of pent-up demand. Growth in the consumer staples segment will pick up pace owing to resumption of rural demand, Crisil said.

Despite single-digit revenue growth, margin has increased on-year consistently for four quarters, indicating a shift in corporate focus towards profitability. An improvement of 150 bps on-year is estimated for fiscal 2024.

As supply pressures ease, commodity prices are likely to be less volatile in fiscal 2025, helping India Inc log a 50-150 bps improvement in Ebitda (earnings before interest, tax, depreciation and amortisation) margin.

Sectors such as consumer staples, discretionary products and industrial sectors, which make up 52 per cent of corporate India’s Ebitda, are expected clock the highest margin expansion, Aniket Dani, Director, CRISIL MI&A Research, said.