Negating any hopes of a rebound in the revenue growth for India Inc in the quarter ending March 2013, Crisil Research has projected that the topline growth for the quarter is likely to decelerate to 6-7 per cent as against a growth of 17.5 per cent clocked in the corresponding period last year. The projections do not factor in banks and companies in the oil and gas sectors.
The report said deceleration will be on account of the slowing demand and pointed out that while growth in investment-linked sectors are expected to continue to decelerate at a fast pace, even the consumption-led sectors are experiencing moderation in growth. The report also projects that the weak demand will have an impact on EBITDA margins, which will decline by 30-50 basis points over the fourth quarter 2011-12.
Experts have, in the recent past, maintained that the corporate profitability is almost at the bottom of the decline and may now see a revival going forward. The report, however, highlighted that the private final consumption expenditure growth in Q3 2012-13 stood at 4.6 per cent as against 9.2 per cent in Q3 FY12 which resulted from a slow growth in sectors such as automobiles, hotels, retail and readymade garments.
?Manufacturing and investment-linked sectors are anticipated to grow at a tepid pace of 4-5 per cent in Q4 FY13,? said Mukesh Agarwal, President, Crisil Research. The last time such sluggish growth was seen was three years back in Q1 2009-10 which was on the back of a slowdown in the global economy after the financial crisis in the US. ?But this time, domestic issues such as administrative delays, high cost of capital and persistent inflation are largely responsible for slowing demand growth,? he added.
The report said that sectors such as capital goods, construction, commercial vehicles, tyres, auto components and steel will see a decline in revenue during the quarter over the same quarter last year.