India Inc revenue growth pegged at 18-20% in Q2
Crisil study involved 300 cos that account for 55-60% of the market capitalisation of the NSE
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Mumbai: Higher commodity prices and continued revival in demand for consumer discretionary products likely lifted corporate revenue 18-20 per cent on-year to Rs 8.2 lakh crore in the second quarter of this fiscal, according to a latest study by CRISIL Research.
The study engaged 300 companies (excluding from the financial services and oil sectors) that account for 55-60 per cent of the market capitalisation (mcap) of the National Stock Exchange (NSE). Revenue from consumer discretionary products such as automobiles likely spurted 19-21 per cent on-year, aided by higher realisations and volume. Construction-linked sectors are estimated to have grown 22-25 per cent on-year, benefiting from the low-base effect of last fiscal. Overall revenue growth would be primarily supported by price hikes driven by costlier commodities.
On-year volume growth would be mostly in single digit across key segments except commercial vehicles. To be sure, growth momentum would have slowed compared with the 47 per cent on-year increase seen in the first quarter.
On a sequential basis, overall revenue is likely to have grown 8-10 per cent. Revenue from consumer discretionary products is expected to have risen 23-25 per cent sequentially after demand was hit by the second wave of the Covid-19 pandemic in the first quarter. Construction-linked sectors are estimated to have grown a moderate 3-5 per cent as seasonal weakness slowed down execution and volume growth.
Revenue in the automobiles sector is estimated to have grown 27-30 per cent sequentially, led by an increase in realisations. That, in turn, is expected to steer growth for ancillary segments such as auto components and tyres, which have likely grown a robust 12-14 per cent and 6-10 per cent on-quarter, respectively. Overall revenue of the sample set is expected to have risen to Rs 15.8 lakh crore in the first half of this fiscal, up 30- 32 per cent on-year.
Hetal Gandhi, Director, CRISIL Research, said: "Elevated commodity prices and healthy realisations would lead to better revenue performance across sectors in the second quarter. As many as 24 of the 40 sectors represented by these 300 companies have likely grown over 20 per cent on-year. But overall revenue growth would be a notch lower at 15-17 per cent excluding commodity sectors such as steel and aluminum."
