India Inc revenues to rise 8-10% in Q2, profit margins to also expand: Crisil

India Inc is all set to report an 8-10 per cent jump in revenues for the September quarter while profit margins will also witness an expansion, an arm of rating agency Crisil said on Friday.

This will be the first time in four quarters that the revenue growth will see an increase, it said.

Automobiles, construction (which benefitted from truant monsoons) and information technology services sectors will be driving the revenue growth in the quarter, the rating agency said, adding that the year-on-year revenue growth in the preceding June quarter had stood at 7 per cent.

The agency said its expectations are based on an analysis of 300 companies excluding ones in banking and oil sectors.

"Growth in revenue was largely skewed towards consumer discretionary products and services, where automobiles and the retail sector led the pack, and construction-linked sectors, where companies accrued benefits from an early deployment of capital expenditure by the roads and railways ministries,” Director of Research at Crisil Market Intelligence and Analytics, Aniket Dani, said.

The improvement in revenue growth would have been stronger had it not been for a decline in agri-linked sectors such as fertilisers, industrial commodities such as chlor-alkalis, petrochemicals and commodity chemicals, and aluminium, the report said.

Nine sectors accounting for 70 per cent of the overall revenue will report a growth in revenue, the agency said.

On the profitability front, the agency expects the operating profit margins to improve to 20 per cent during the second quarter as against 17.2 per cent in the year-ago period. However, these would be moderating from 20.5 per cent in the preceding June quarter.

The report said rising crude oil prices are monitorable, and added that inadequate monsoons could impact rural demand in the second half of the fiscal.