Corporate India’s revenues set to decline

CHENNAI: India Inc's revenue growth (excluding  banks,  oil and gas companies) will decelerate to 6-7% during January-March 2013 as against 17.5% during the fourth quarter of FY 12 on the back of waning demand. While growth in investment-linked sectors is expected to continue to decelerate at a fast pace, consumption-led sectors too are experiencing moderation in growth. "Manufacturing and investment linked sectors are anticipated to grow at a tepid pace of 4 to 5% in the fourth quarter of FY 13. Such sluggish growth was last witnessed over three years ago in the first quarter of FY 10. This was due to a dramatic slowdown in the  global economy after the credit crisis in the United States. But this time, domestic issues such as administrative delays, high cost of capital and persistent  inflation are largely responsible for slowing demand growth," Mukesh Agarwal, president,  CRISIL Research said. The rating agency's analysis of 28 key sectors (excluding banks, oil and gas companies) indicates that capital goods, construction, commercial vehicles, construction, tyres, auto components and steel are expected to witness either a revenue decline or low single digit in the fourth quarter of FY 13 on a year on year basis, due to a weak demand environment. Also, the persistent weak demand is expected to put further pressure on already low margins. TOI