MUMBAI: Revenues of companies in key sectors such as automobiles, IT services, power, steel products, telecom services, pharmaceuticals and FMCG are expected to grow 7 per cent in the July-September 2016 quarter, compared with a marginal 2 per cent in the year ago period, according to credit rating agency Crisil.
In a report on “Corporate Profitability: Review and Outlook”, Crisil said this will be the second-best show in six quarters. The report excludes banking, financial services and insurance (BFSI) and oil companies. The fillip comes from low-base effect (revenue growth in the corresponding quarter last fiscal was stagnant), improvement in urban and rural consumption, and low commodity prices.
During the April-June quarter (Q1FY17), India Inc. reported 5 per cent year-on-year revenue growth, compared with stable revenue in the Q1 of FY16. Crisil estimates a 50 bps increase in operating margin (operating profit/ net sales) in the July-September quarter at 19.8 per cent, from 19.3 per cent in the year ago quarter. During the second quarter, automobile, steel products, telecom services and FMCG (fast moving consumer goods) firms are expected to record better operating margin compared with last year. On the other hand, firms in the IT services, power and pharmaceuticals are likely to witness a contraction in operating margin.
