Low base drives up Corporate India's Q1 revenues 17% on y-o-y basis; consumer-oriented sectors do well, says Icra

Last Updated: Sat, Sep 08, 2018 13:36 hrs
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Mumbai: "Indian corporate sector's aggregate revenues have grown by 17.1 percent during the first quarter (Q1FY19), on a year-on-year basis," domestic rating agency Icra Ratings said in a note.

ICRA analysed 660 companies as part of its research and explained that 26 of the 32 sectors that it analysed had shown a revenue growth.

Consumer-oriented sectors like auto, fast moving consumer goods, consumer durable, restaurants and airlines, and commodity-linked sectors like cement, iron and steel and oil and gas continued to do well, while sectors like capital goods, pharmaceuticals, media and fertilzsers have also witnessed strong revenue growth.

"This growth has been achieved on low-base, adversely impacted by GST implementation in Q1 FY 2018 besides, healthy consumption-driven demand as well as pick-up in infrastructure spending," said Shamsher Dewan, group head for corporate sector ratings.

He, however, added that as compared to the preceding March quarter, sales declined 2.4% on seasonal factors.

Sectors that witnessed decent margin improvement were metals and mining (including iron and steel) due to uptick in commodity prices and the consumer food sector, supported by lower input costs like milk and sugar, the agency said.

Consumer goods, paints, FMCG and auto-expanded their margins as they partially absorbed raw materials price hikes to mitigate the impact, it added.

Airlines, tiles and ceramics and cement sector witnessed significant erosion in margins due to rising fuel prices, while factors like subdued realisations (sugar), charter rates (shipping), decline in APRUs and rise in network costs (telecom) too exerted pressure on earnings of companies, it said.

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