Corporate Caution: Revenue Uncertainty Looms in Q1FY25

Corporates are anticipating revenue uncertainties for the Q1FY25 period due to reduced government spending and the monsoon onset, according to domestic rating agency Icra. Despite a 6.5% revenue growth in Q4FY24, sequential growth will slow in Q1FY25 because of these factors.

Corporates are bracing for revenue uncertainties in the first fiscal quarter of 2025. According to domestic rating agency Icra, the April-June period will see a slowdown due to reduced government spending and the onset of the monsoon season.

Icra noted that while there was a 6.5% sequential revenue growth in Q4FY24, Q1FY25 will face headwinds from both the Parliamentary elections and seasonal factors. The agency's analysis of 558 listed companies showed a marginal improvement in profit margins, indicating a steady operational environment despite these challenges.

Kinjal Shah, co-group head for corporate ratings at Icra, highlighted that geopolitical tensions and sectoral debt increases also pose risks. However, steady raw material costs are expected to maintain operating profit margins at 15-18%.

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