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India Inc's revenue growth slowed to between 5-7 percent for the July-September quarter, largely due to weaker performance in construction, industrial commodities, and investment-linked sectors, according to a report from CRISIL Market Intelligence and Analytics.
As per the data, this quarter marked the slowest revenue growth in the past 16 quarters, primarily weighed down by sluggish activity in key sectors. Construction and industrial commodities contributed minimally, registering just a 1 percent growth, while the agriculture sector faced a steeper decline. The agriculture segment, including fertilisers, which makes up 2 percent of the overall sample, recorded a substantial 20-22 percent drop. The export segment, accounting for roughly 22 percent of the sample, grew by a modest 5 percent. The "others" category, including aluminium, grew by 4 percent, highlighting the uneven performance across sectors, as reported by ANI.
Elizabeth Master, Associate Director of Research at CRISIL Market Intelligence and Analytics, noted that although overall revenue growth was muted, sectors such as IT services, pharmaceuticals, and automotive managed to expand EBITDA margins. According to Master, "Among the top 10 sectors, which account for 75 percent of revenue, eight saw EBITDA margin expansion, led by export-linked sectors such as IT services and pharmaceuticals, investment-linked sectors like power, and consumer-focused segments such as automotive and telecom services." She added that steel and cement were the only two sectors to see a decline in margins, impacted by higher input costs and weaker pricing dynamics.
Despite this overall revenue slowdown, consumer discretionary, staples, and services sectors delivered a 15 percent growth, contributing to about 36 percent of the sample's total revenue. These sectors demonstrated robust performance, contrasting with the slower growth in construction and agriculture.
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Furthermore, CRISIL's analysis indicated resilience in profitability, with an estimated aggregate EBITDA growth of around 10 percent for the quarter. The report pegged the EBITDA margin at 21-21.5 percent, indicating strong earnings performance even amid weaker revenue growth. Looking ahead, CRISIL anticipates an additional margin improvement of 50-150 basis points over the fiscal year, driven by easing commodity prices and greater volume-based revenue growth, as per ANI.
This analysis reflects mixed growth across sectors, where consumer and service segments continue to show promise, while key industrial sectors grapple with challenging conditions.
(With inputs from ANI)
