BackIndia Inc.’s revenue to fall 8-10% QoQ in Apr-Jun: Crisil
Crisil said estimates are based on an analysis of 300 companies, which account for 55-60% of the market capitalisation excluding financial services and oil companies of the NSE
PremiumMUMBAI: India Inc. will report a sequential revenue decline of 8-10% to an estimated ₹7.3 trillion for the first quarter of fiscal 2021-22 (Q1FY22), Crisil said in a report. The quarter-on-quarter (QoQ) fall in revenues will be largely led by consumer discretionary products such as automobiles, which saw volumes hit by lockdown across states to contain the second wave of pandemic.
"However, on a year-on-year(YoY) basis, improvement will be seen across sectors, riding on higher volume on a low base and higher realisations due to increase in commodity prices, revenue will rise 45-50% on a low base for these firms. Factoring out the commodity sectors, on-year revenue growth will be lower at 37-40%," the report said.
Crisil said estimates are based on an analysis of 300 companies, which account for 55-60% of the market capitalisation excluding financial services and oil companies of the National Stock Exchange. The sequential drop would be broad-based, with 25 of the 40 sectors represented by these companies logging lower revenues.
“The robust on-year revenue growth is reflective of higher commodity prices and a low base of last year. On a sequential basis, however, sectors such as automobiles, FMCG and construction have seen moderation, while the likes of steel and aluminum continued to grow strongly because of high commodity prices. Even export-linked sectors such as IT services and pharmaceuticals have shown strong resilience in terms of weathering the blow of the second wave sequentially," said Hetal Gandhi, Director, Crisil Research.
In terms of EBITDA (earnings before interest, tax, depreciation and amortisation), Crisil sees a 6-8% drop on a sequential basis but approximately 65% higher on-year, given a low base, for the first quarter of fiscal 2021-22. However, operating profitability, as represented by Ebitda margin, is expected to improve a mere 0-50 bps on quarter and 170-370 bps on year due to rising commodity prices.
Excluding aluminium and steel products, the on-year margin expansion will be lower at 20-60 bps, while sequential margins will be flat. As many as 27 of the 40 sectors are expected to log a sequential drop in Ebitda margin.
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