India Inc is set to post 20 percent revenue growth in Q2: Report

According to the domestic rating agency Crisil, India Inc is set to post an 18- 20 percent revenue growth for July-September as compared to the year-ago period. The handsome growth in the topline will be driven by both higher volumes and higher commodity prices, the rating agency said. However, the rising input prices may have capped operating profit margin expansion for companies when compared to the preceding quarter, it said.

Companies had taken a cautious approach immediately after the onset of pandemic and resorted to a host of cost control measures including salary cuts which resulted in businesses being largely protected even as demand dried up. Crisil said the recovery for the Q2 was seen across sectors, led by higher volumes and commodity prices.

Volume gains are attributable to a low base of the second quarter of fiscal 2021, which saw regional lockdowns and slower economic activity. Of the 40 sectors represented by its sample set of 300 companies (excluding financial services and oil), 24 are expected to have grown by over 20 percent, it said. If one excludes commodity-linked sectors such as steel products and aluminium, overall growth is expected to have been a notch lower at 15-17 percent, it added.

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