Comments
India Inc’s revenues are expected to grow 9-11 per cent in the quarter ended June 30, 2014, compared with 4.3 per cent in the same period last year and 8.4 per cent in the quarter ended March 31, 2014, according to a study by Crisil Research.
This growth will largely be driven by strong growth in export-oriented sectors and select domestic consumption-driven sectors such as FMCG, passenger vehicles, and two-wheelers, it said.
The study covered 600 companies (excluding financial services and oil companies), representing 71 per cent of the overall market capitalisation of India Inc.
Below-normal monsoon
Crisil assessed that while a gradual resumption of stalled projects and improvement in global economic growth bode well for longer-term revenue growth, the increasing probability of a below-normal monsoon enhances downside risks for sectors that generate substantial revenue from the rural areas
For the entire fiscal year 2014-15, Crisil has forecast Indian corporates to report 11-12 per cent revenue growth.
Mukesh Agarwal, President, Crisil Research, said “Export-oriented sectors such as IT services, pharmaceuticals, and readymade garments should post a revenue growth of 16-20 per cent in Q1 FY15 riding on two factors: one, a currency base effect due to the rupee remaining 6 per cent below the levels seen in the June quarter of fiscal 2014 despite its recent appreciation, and second, a strong volume growth in exports. What will also provide additional thrust is the improvement in the overseas operations of some companies.”
Sector-wise performance
Crisil said the sectors that are likely to outperform in Q1 FY15 are two-wheelers (led by volume growth), steel (increase in volumes of large companies due to market share gains and better realisations), power generation (capacity additions and realisation gains), FMCG (primarily pricing-led), and shipping (rise in freight rates).
On the other hand, infrastructure and investment-linked sectors such as construction, capital goods and cement will lag behind because the pace of project execution continues to be tardy.
Revenues of cotton spinners will be crimped as demand from China fell, while tractor makers will be dragged by a considerable slowdown in domestic sales volumes. Real estate developers will continue to hurt from slow sales and launches.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.