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Companies to see lowest profit,revenue growth in 2 yrs in Q1: Report

MUMBAI: India Inc will see the slowest quarterly revenue gro..

MUMBAI: India Inc will see the slowest quarterly revenue growth in two years, which will more than halve to 6 percent from 14-15 percent, due to a deceleration in consumption and lower realisations, says a report.

Not just the topline, but corporate India is also staring at a sharp fall in profitability, with operating profit growth expected to come in at a low 3 percent as against an average of 13 percent in the past four quarters, Crisil said in its earnings preview Tuesday.

Revenue growth decline will be very sharp, if compared to the average of 14-15 percent in the past four quarters, said the agency based on the analysis of 295 companies, which exclude those in banking, financial services & insurance and oil & gas, which account for 60 percent of the mcap.

The automobiles and FMCG sectors will be the worst impacted, the report added.

"Automobiles, one of the key sectors driven by consumption spending, continues to reel under a demand slowdown," said Miren Lodha, a director at the agency.

He said higher cost of ownership continues to dampen consumer sentiment for passenger vehicles, while commercial vehicle sales are being impacted by new axle norms, inventory build-up and liquidity crunch, which have led to a steep fall in volume since the past eight months.

On the FMCG front, he said weakened rural consumption and a high base are expected to cause a moderation in growth.

Aggravating the pain will be a fall in realisations Read More – Source

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