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India Inc likely to report lower revenue, profit growth in Q3FY19

08 Jan 2019 Evaluate

Credit ratings agency, Crisil Ratings in its latest report has said that India Inc is likely to register fall in revenue as well as profit growth numbers in Q3 (October-December) of 2018-19. Attributing the estimate mainly to high base in general and certain sector specific issues, it said that revenue growth will dip by up to 5 percentage points on average to 12-13 percent. 

According to the report, auto companies will post a revenue growth of only 4 percent on rise in ownership costs and weaker finance options which have hit sales during the quarter while the same for the FMCG sector will be 8 percent on sluggish rural demand. It also noted that sugar, aluminium and telecom will face pressure from lower realisations. It also said that growth in operating profit will decline to 10 percent from 15 percent growth levels achieved over the preceding three quarters. Adding further, it said that commodity-linked sectors will see a jump in revenue growth, led by natural gas (37 percent), steel products (27 percent), cement (10 percent), while infrastructure-related sectors like construction are expected to clip at 12 percent.

Besides, the ratings agency has stated that the rupee was weaker by 11 percent during the quarter, which will benefit export-linked sectors such as software and pharma, which are estimated to grow by 21 percent and 10 percent, respectively. It noted that commodity- and infrastructure-linked sectors are expected to support revenue for the December quarter. In consumption spending-led sectors such as airlines and retail, it said that revenue will be supported by positive demand sentiment while in export-oriented segments such as software services and pharma, the boost would come from a weak rupee.

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