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Corporate profitability to decline for 3rd consecutive quarter
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IANS | 11 Jul, 2022
Corporate profitability -- or the earnings before interest, taxes,
depreciation and amortisation (Ebitda) margin -- likely remained steady
in the first quarter sequentially, but fell 200-300 basis points (bps)
on-year, CRISIL's analysis of over 300 companies (excluding those in the
financial services, and oil and gas sectors) indicates.
That would mark the third consecutive quarter of on-year decline.
Ebitda
margins of almost half of the 47 sectors tracked by CRISIL Research are
estimated to have contracted on-year during the quarter.
Absolute
Ebitda profit, too, shrank for the first time in five quarters as
companies were unable to fully pass on the increase in input costs,
especially of key metals and energy.
Says Hetal Gandhi, Director,
CRISIL Research, "The current fiscal could see Ebitda margin contract
further, to reach 19-21 per cent largely due to elevated energy and
metal prices. The Ukraine-Russia conflict has sent crude and natural gas
prices soaring, and poses uncertainty for trade in metals such as
steel, which will lead to elevated prices of commodities and hence
continued pressure on profitability."
Says Sehul Bhatt, Associate
Director, CRISIL Research, "Of the total on-year incremental revenue in
the first quarter of the current fiscal, nearly 54 per cent was
contributed by just two segments, construction-linked and consumer
discretionary products. Majority of this rise was supported by the steel
and cement sectors. Of the total on-year incremental absolute Ebitda
profit in the quarter, consumer discretionary products and consumer
discretionary services accounted for around than 60 per cent, largely
supported by airlines services, media & entertainment etc."
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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