With 15 out of 26 sectors facing severe margin pressure due to higher interest cost and slowing sales in the current quarter, Crisil expects revenue growth of leading corporates to report their weakest quarterly numbers in the past six quarters.
“Revenue growth in the April-June quarter is forecast to drop to around 14 per cent from 17.5 per cent a year ago, given the slowdown in economic activity and gross fixed investments.
“Accordingly, Ebidta (earnings before interest, taxes, depreciation and amortisation) margins are projected to decline by 100-150 basis points (bps) or 1-1.5 percentage points on a y-o-y to 19-20 per cent, but remain flat compared sequential (Q4 of FY12),” Crisil said on Tuesday.
The report is based on the analysis of aggregate financial performance of 247 large companies across 26 key sectors, excluding banks and oil & gas companies and constitute around 65 per cent of the BSE 500 Index.
“The revenue growth in Q1 FY13 is expected to be much weaker due to a sharp deceleration in airlines, auto components, commercial vehicles, hotels, metals, organised retail, real estate and textiles,” said the report.
Although, overall Ebidta margins are expected to remain flat in Q1 on a q-o-q basis, 15 of the 26 sectors will continue to face margin pressure, said the agency.
“For sectors like commercial vehicles, cement, construction and real estate, Ebidta margins are set to contract by 100-200 bps q-o-q, due to slower demand growth and high input costs,” said Crisil Research senior director for industry and customised research Prasad Koparkar.