In World Economy News 10/04/2015
CRISIL Research, India-based independent research house, expects India Inc.’s revenue growth to slip to a 7-quarter low of 2.5 per cent on a year-on-year (y-o-y) basis in the March 2015 quarter.
The weak performance of investment-linked sectors and low global commodity prices will more than offset the moderate growth anticipated in export-oriented sectors and consumer-driven sectors.
In the preceding quarter as well, revenue growth was a tepid 5.4 per cent. On the profitability front, though, we foresee a marginal uptick in EBITDA margins, the CRISIL report says.
The rapid slide in global commodity prices will hurt topline growth of steel, petrochemicals,and commodity chemical producers during the quarter.
– Pressure on realisations as well as sales volumes in both India and overseas operations (of Tata Steel Europe) will lead to a 10-11 per cent y-o-y decline in revenues of the Indian steel industry during Q4 2014-15.
– On account of a 28% drop in crude oil prices, revenue growth of the petrochemicals industry is expected to decline by 20-22%. Similarly, the revenues of the commodity chemicals sector are projected to decline by 18-19%, as realisations of most chemicals are expected to sharply decline, even while sales volumes increase for all chemicals.
Growth for construction and capital goods sectors’ will continue to remain sluggish due to lower order backlog and slow project execution.
▪ Stable currency exchange rates is expected to impact the revenue growth of export oriented sectors:
– Revenue growth of the IT sector is expected to be in the range of 11-13% y-o-y, mainly owing to a rise in volumes, as benefits from a weak rupee fade.
– Revenues of the pharmaceuticals industry are expected to increase by a moderate 10% y-o-y
– In the textiles space, cotton spinners are likely to report a 9% revenue decline on the back of lower export demand from China and pricing pressure. Readymade garment manufacturers are forecast to do better, reporting 4% revenue growth, led by healthy sales growth in both exports and domestic market.
