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India Inc is likely to report a 200-250 basis points decline in the EBITDA margins for the quarter ending March 2012, said a Crisil research report released today.
EBITDA margins for the corresponding quarter last fiscal was 22 per cent. The decline was mainly on account of slower volume growth and high cost of inputs coupled with limited pricing flexibility, said the report.
Net profit is likely to be lower than the 12.7 per cent reported in Q4FY2011.
Revenue growth for the quarter is expected to be around 15 per cent against 25.5 per cent growth seen in the same quarter last fiscal.
“The drop in revenue growth is reflective of the slowdown in consumption growth and sluggish investment activity, coupled with an uncertain global environment,” said the report.
According to the Crisil report, airlines, auto components, commercial vehicles, metals, real estate, hotels, textiles, organised retail and paper sectors will likely experience steep moderation in revenue growth.
“During Q4 FY12, we anticipate a sharp drop of 400-800 bps y-o-y in margins for players in airlines, aluminium, hotels, cotton yarn, and manmade fibres sectors, mainly due to slower volume growth and high raw material and wage costs. EBITDA margins for auto and auto component makers, steel, and paper manufacturers even are likely to decline by 100-300 bps,” said the report.
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