India Inc to report decline in both revenue, profit during December quarter

India Inc is set to report a decline in both revenue as well as profit growth numbers in the December quarter, says a report. Revenue growth will dip by up to 5 percentage points on average to 12-13 per cent, domestic rating agency Crisil said in a report Monday and attributed the estimate mainly to a high base in general and also due to certain sector-specific issues.

Auto companies will post revenue growth of only 4 per cent on rising in ownership costs and weaker finance options which have crimped sales during the quarter, while the same for the FMCG sector will be 8 per cent on sluggish rural demand, it said, adding sugar, aluminium and telecom will face pressure from lower realisations. Operating profit growth will decline to 10 per cent, a sharp decline from 15 per cent growth levels achieved in the preceding three quarters, the report said.

Commodity-linked sectors will see a jump in revenue growth, led by natural gas (37 per cent), steel products (27 per cent), cement (10 per cent), while infrastructure-related sectors like construction are expected to clip at 12 per cent. The rupee was weaker by 11 per cent during the quarter, which will benefit export-linked sectors such as software and pharma, which are estimated to grow by 21 per cent and 10 per cent, respectively, it said.

"Commodity and infrastructure-linked sectors are expected to support revenue for the December quarter," said Prasad Koparkar, a senior director at Crisil. In consumption spending-led sectors such as airlines and retail, revenue will be supported by positive demand sentiment, while in export-oriented segments such as software services and pharma, the boost would come from a weak rupee, he said.