India Inc’s revenue growth is expected to touch double digits in fiscal 2024 despite a global slowdown and interest rate hikes, an analysis by Crisil of 748 listed companies from fiscal 2011 onwards (excluding those from the oil and gas, banking, financial services and insurance sectors) shows.

This will be driven by a 10-12 per cent growth in revenue for the non-commodity sectors, even as commodity prices remain benign.

Importantly, this will follow a 16-18 per cent on-year rise in revenues in fiscal 2023 after the commodity supercycle boost in fiscal 2022.

The revenue increase in fiscal 2023 has been led by an estimated 18-20 per cent on-year increase in non-commodity segments, with commodities recording an anemic 5-7 per cent growth coming off a high base.

Operating margin is expected to improve 120-170 basis points in fiscal 2024 aided by three factors — benign commodity prices, the full effect of price hikes taken in fiscal 2023 playing out, and volume growth.

In fiscal 2024, margin expansion is projected to be broad-based, with margin improvements across sectors as cooling commodity prices reduce costs, while revenue gets a lift from volume expansion.

Private investment concentrated

However, when it comes to capital expenditure by India Inc, it is highly concentrated. In fiscal 2019, nearly 80 per cent of these were by just 5,000 companies. To drill down further, just 400 companies accounted for half of the capex. Between fiscals 2018 and 2022, capex grew ~7 per cent on an average. In absolute terms, overall capex averaged ₹3.75 lakh crore between fiscals 2018 and 2022. “We see this number rising to ~₹5.75 lakh crore on average between fiscals 2023 and 2027, marking a ~1.5x increase on an annual basis,” Crisil said in its report.

If investments through the PLI scheme and into new-age sectors are excluded, the growth in capex drops nearly 18 per cent. Last fiscal, capex growth was pegged at 25 per cent. A look into the financials of ~350 industrial companies that account for ~40 per cent of the capex indicates a sustained 23 per cent rise in capex in the first half of fiscal 2023, compared with over 30 per cent increase in the first half of last fiscal. Crisil expects overall capex for fiscal 2023 to rise 16-18 per cent