Deepening economic slowdown: India Inc reports lacklustre performance in FY20 amid coronavirus

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July 28, 2020 11:44 AM

While corporations started on a rocky note during the previous financial year 2019-20, this year has not been benign to India Inc either.

As coronavirus pandemic reached Indian shores, the prevalent slowdown in the economy was intensified, as is apparent from the corporate performance in FY20.

While corporations started on a rocky note during the previous financial year 2019-20, this year has not been benign to India Inc either. As coronavirus pandemic reached Indian shores, the prevalent slowdown in the economy was intensified, as is apparent from the corporate performance in FY20. “Corporate performance for the full year FY20 and for the quarter ended March 2020 alike has been lackluster and disappointing indicative of overall slowdown in various industries and the economy,” a CARE Ratings report said on Monday. While corporations began the year with myriad issues such as weak consumer demand, the outbreak of the coronavirus pandemic has only aggravated the issue. The subsequent nation-wide lockdown towards the end of March 2020 furthered the glitches.

Right from aviation, power, FMCG, to automobile, most of the industries reported lowering of sales growth and weak performance. Further, the coronavirus outbreak also weighed down the companies with lower exports due to muted demand from the overseas markets. While the government induced many measures to keep the fall in check, the same could’t arrest the falling bottom-line in the second half of last fiscal, the report said. “Although the tax burden of the corporates declined following the corporate tax rate cut by the government in an effort to spur investment and boost growth in the country’s faltering economy it failed to uplift the bottom-line of the corporates.” Industries such as logistics, real estate, gems and jewellery, textiles etc reported degrowth.

However, while the majority of the sectors witnessed a slowdown, there are some industries which showed resilience. Telecom industry is one such outlier. “The growth in industry’s sales by 9% in Q4FY20 was driven by a rise in revenues of one of the major companies in the industry. This was backed by upward movement in the company’s 4G subscriber base along with improvement in its tariffs,” the report said. Sugar industry and IT industry also reported robust performance.

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