India Inc is expected to report modest revenue growth of 5-7 percent for the September quarter, which would be a 16-quarter low. Normally, lower sales and profit growth rates weigh on investor sentiment and put downward pressure on stocks.
The slower growth is said to be due to “stagnant performance in the construction sector, which accounts for a fifth of India Inc’s revenue, alongside a decline in the industrial raw materials sector and subdued growth in investment-related sectors,” according to an analysis by 435 major companies by Crisil’s market intelligence and analytics department noted. These 435 companies account for almost half of India’s total market capitalization, the report said.
The construction, industrial raw materials and investment-related sectors – which make up about 38 percent of all companies sampled for the analysis – grew only 1 percent, which depressed overall growth in the second quarter, according to the report. “The agricultural sector, including fertilizers (2 percent of sample sales), saw a decline in sales of 20 to 22 percent.”
