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'India Inc expected to log double-digit revenue growth in Q4'
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SME Times News Bureau | 08 Apr, 2021
A spurt in volumes on a low base, coupled with improvement in
realisations riding on higher commodity prices, are expected to lift
corporate revenue by 15-17 per cent year-on-year to Rs 6.9 lakh crore in
the fourth quarter of fiscal 2021, a Crisil Research report said.
As per the estimates, the double-digit growth comes after eight quarters of either decline or single digit growth.
The
estimates are based on an analysis of 300 companies, which account for
55-60 per cent of the market capitalisation excluding financial services
and oil companies of the National Stock Exchange.
Crisil
Research Director Hetal Gandhi said: "The robust revenue growth rides on
a low base of the corresponding year-ago quarter, besides higher
government capital expenditure, and higher realisations amid a commodity
upcycle, among others."
"A closer look at the revenue breakup
indicates 50 per cent of the recovery is contributed by three key
verticals - automobiles, IT services and construction."
The
report cited that construction-linked sectors such as steel and cement
are estimated to have seen revenue rise 45-50 per cent and 17- 18 per
cent on-year, respectively, buoyed by higher realisations and volumes.
However, the report said that a cloud of uncertainty continues to loom over consumer discretionary services.
"Revenue
for players in sectors such as airline services is estimated to drop 30
per cent on-year amid social distancing and cut in discretionary
expenses, especially travel budgets.
"Similarly, revenue for
players in media and entertainment is also expected to drop 10 per cent
on-year due to lower advertisement spends and subscriptions. That said, a
lower share of such sectors in the top 300 sectoral mix has muted the
impact."
Besides, an increase in commodity prices should result in contraction of margins across key sectors, it warned.
"Margins
in steel, cement and pharmaceuticals sectors, which together account
for 30 per cent of aggregate Ebitda profits, are expected to contract by
380 bps, 230 bps and 160 bps, respectively, on a sequential basis."
"Despite
this, fiscal 2021 would see Ebitda profiles rise 12-13 per cent on-year
over flat revenues. Ebitda margins would reach a decade high of 22.2
per cent led by low commodity prices in the first half and fixed
cost-reduction initiatives across companies for the year."
In
addition, the report said that due to the second wave, states are likely
to mount partial lockdowns, keeping demand recovery uncertain in the
near term.
"Newer strains of the virus, scale of vaccinations and
subsequent revival in demand would be among the key monitorables for
fiscal 2022."
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
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75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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