Ahead of the quarterly corporate earnings season, the credit rating agency, Crisil in its latest report has predicted that the revenue growth rate of India Inc (excluding banks, financial services & insurance and oil & gas companies) will slow down to 9% in the fourth quarter (Q4) of the financial year 2017-18 on base effects.
The report, based on analysis of over 400 companies, is also expecting contraction in the pre-tax profit margins of up to 0.70% to come in at a 12-quarter low of 18.6% but it highlighted that the pace of contraction is now reducing. It also anticipated that consumption-driven sectors such as automobiles, retail and airline services will see revenue growth in excess of 15%, on the back of volumes and abating GST linked teething troubles. It said that among commodity-linked sectors, natural gas and cement are expected to post robust growth, supported by volumes, while the likes of petrochemicals and steel products would benefit from continued higher prices.
The rating agency added that overall, 11 out of 21 key sectors are expected to log near double-digit revenue growth in January to March quarter. However, Telecom would continue to face pricing pressure as incumbents slash tariffs to retain subscriber market shares. Export-linked sectors such as IT and pharmaceuticals, too, will continue to disappoint, amidst a tough international environment coupled with appreciating rupee.