1. GST positives: All you want to know in 5 brief points

GST positives: All you want to know in 5 brief points

Almost half of the participants are planning for revenue jump as a result of GST .

By: | New Delhi | Published: April 29, 2017 4:26 AM
GST is expected to provide a boost to demand and improve bottomline. (Reuters)

The CII-BCG monthly growth survey of CXOs across sectors indicates that overall, March sales grew by ~ 5% across respondents, with the economy bouncing back on the growth trajectory after demonetisation. New order inflows across respondents saw a strong growth of ~8.2% driven by welding as well as metals & mining segments.Participants across industries are very positive with respect to the impact of GST implementation. Almost half of the participants are planning for revenue jump as a result of GST .

Building materials
Respondents witnessed an average revenue growth of 6.3% (with volumes growing by around 6.9%). Northern region seemed to have performed the best, clocking ~6% positive value growth, while eastern region registered worst performance with ~2% YoY value as well as volume growth. GST is expected to provide a boost to demand and improve bottomline.

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Material handing Equipment
Respondents reported an average revenue growth of 7.5% (with volumes increasing by ~11%). Highest value growth witnessed in the Eastern region (11%); with the other regions also performing well at ~7-8% rate. MHE customers are deferring procurement due to impending GST implementation. The MHE companies are also deferring capex investment plans. However, GST will be highly beneficial to the logistics and transportation sector.

Engineering Products
The sector witnessed strong growth in March with respondents reporting a value growth rate of 6.9% (volumes increased by 6.6%). For the second consecutive month, Southern region witnessed highest growth of ~7% in value as well as volume terms. Eastern region lagged behind with 4% growth YoY. GST expected to result in temporary slowdown in sales around July. Also, some concerns exist with respect to the exact provisions.

Welding
Respondents in the welding sector experienced overall value growth at the rate of 2.5% (with volume growth of 6%). Eastern region saw the highest growth in terms of both value (10%) and volume (9%). Southern and Western regions lag the other two with 4% and 3% growth rates respectively. Participants have witnessed topline growth last year, however shrinking margins continue to remain a concern for the sector. GST expected to bring a lot of new changes in the industry.

Metals and Mining
The growth in the sector has been strong. Respondents reported a growth of 11% in value as well as volume terms. Northern and western regions grew more (@13%) compared to Eastern and southern regions (@10%).

Automotive Components
Respondents witnessed strong growth of 8.1% in terms of value and volumes. Southern, western and northern regions clocked 8%, 7% and 6% growth rates respectively, whereas the eastern region grew at the rate of 4%. GST expected to rationalise cost structure and reduce working capital requirements for industry participants.

Arun Bruce, partner and director, BCG Sangita Das, deputy director, CII and Mani Singhal, principal, BCG

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