Sluggish performance in construction, industrial raw materials and investment-linked sectors has led to moderation in Indian Inc’s sales growth, CRISIL Market Intelligence and Analytics found.
According to the market intelligence agency, sales growth for the three months from the end of September was 5-7 percent.
India Inc. saw a significant slowdown in sales growth during the July-September quarter, marking the slowest pace in the past 16 quarters.
Sectors such as construction and industrial raw materials saw growth of only 1 percent, which weighed heavily on overall revenue growth.
Agriculture, which includes fertilizers and accounts for 2 percent of the sample’s income, recorded a steep decline of 20 to 22 percent. The export segment, which represents roughly 22 percent of the sample, grew by a modest 5 percent, while the ‘other’ industry, including aluminum, grew by 4 percent.
Commenting on the outcome of the observations, Elizabeth Master, Associate Director-Research, CRISIL Market Intelligence and Analytics, noted: “Of the top 10 sectors, which account for 75 percent of revenues, eight saw an increase in Ebitda margin, led by export-related sectors such as IT services and pharmaceuticals, investment-linked sectors such as energy, and consumer durables sectors such as automotive and telecom services. The two sectors that experienced a contraction in margins were the steel sector, due to higher iron ore prices, and the cement sector, due to subdued market conditions.”
In contrast, the consumer durables, staples and services sectors posted robust growth of 15 percent, contributing to about 36 percent of the sample’s sales.
Interestingly, despite the sales slowdown, the companies’ profitability was resilient, the analysis shows.
Furthermore, the company estimates that total corporate EBITDA grew by approximately 10 percent in the second quarter of fiscal 2025, with EBITDA margin estimated at 21-21.5 percent.
Of the top 10 sectors, which represent almost 75 percent of total turnover, eight saw an increase in EBITDA margin, the market intelligence agency said.
Going further, the company expects that margins are expected to improve further by 50-150 basis points over fiscal 2025, driven by easing of commodity prices and increased volume-based revenue growth.
