Revenue growth in Q3 to slip to 4%: Crisil Research

Revenue growth in Q3 to slip to 4%: Crisil Research NEW DELHI: The currency ban could impact topline growth of the corporate sector by 4% year-on-year for the quarter ending December 31, 2016, a new report by Crisil Research says. Revenue growth had picked up to an average 6.3% from around 1.7% in the four quarters prior to that, the report says, forecasting that the impact of

demonetisation would continue in the current fiscal. However, pace of growth in Q4 will still recover to 5-7%, the report adds.

The forecast has been put together analysing financial results of 390 companies, which account for close to 64% of the market capitalisation of the National Stock Exchange, and exclude banking, financial services and insurance (BFSI) and oil companies, it says.

While investment-linked sectors had seen subdued growth in the fiscal first half of FY16, consumer linked sectors such as FMCG, housing, retail, telecom services and textiles would witness de-growth in Q3FY17, the report says. “The impact of demonetisation has been telling and consumer spending on discretionary items has almost dried up,” Prasad Koparkar, senior director at CRISIL Research wrote.

“Despite favourable monsoon and lower borrowing costs, we expect key consumption-driven sectors such as automobiles, telecom services and FMCG to record the slowest growth in two years,” Koparkar wrote in the report.

On the other hand, steel product companies are expected to report robust 25% growth, primarily led by 18% higher realisations helped by government support and growth in exports.

Sales volume of cars and utility vehicles have declined. Across FMCG, while realisation is expected to remain stable, volumes are expected to take a hit. Gross revenue of the telecom services industry is expected to fall 11% on-year, given Reliance Jio’s entry and demonetisation, the report adds.