India Inc logs double-digit revenue growth in Q4: Crisil

Mumbai (Maharashtra) [India], Apr 9 : A spurt in volumes on a low base coupled with improvement in realisations riding on higher commodity prices lifted corporate revenue 15 to 17 per cent on-year to Rs 6.9 lakh crore in the fourth quarter of fiscal 2021, according to a recent Crisil Research estimate.
The double-digit growth comes after eight quarters of either decline or single-digit growth. With a visible recovery in the second half of fiscal 2021, overall revenue for the sample set may be a mere 0.5 per cent lower compared with fiscal 2020.
This is also supported by larger players displaying more resilience than mid corporate and smaller players in dealing with the pandemic impact.
Crisil estimates are based on an analysis of 300 companies which account for 55 to 60 per cent of the market capitalisation (excluding financial services and oil companies) of the National Stock Exchange.
"The robust revenue growth rides on a low base of the corresponding quarter a year ago besides higher government capital expenditure and higher realisations amid a commodity upcycle, among others," said Hetal Gandhi, Director of Crisil Research.
A closer look at the revenue breakup indicates 50 per cent of the recovery is contributed by three key verticals - automobiles, IT services and construction.
Construction-linked sectors like steel and cement are estimated to have seen revenue rise 45 to 50 per cent and 17 to 18 per cent on-year respectively, buoyed by higher realisations and volumes.
Domestic prices of flat steel and cement are estimated to have increased 32 per cent and 2 per cent on-year respectively, supporting revenue growth in the quarter.
But the picture is not rosy across verticals. Crisil said a cloud of uncertainty continues to loom over consumer discretionary services.
Revenue for players in sectors like airline services is estimated to drop 30 per cent on-year amid social distancing and cut in discretionary expenses, especially travel budgets.
Similarly, revenue for players in media and entertainment is also expected to drop 10 per cent on-year due to lower advertisement spends and subscriptions. A lower share of such sectors in the top 300 sectoral mix has muted the impact.
On the other hand, earnings before interest, tax, depreciation and amortisation (EBITDA) is estimated to be 28 to 30 per cent higher on-year for the fourth quarter, significantly better than revenue growth.
As COVID-19 cases rise with the second wave, states are likely to mount partial lockdowns, keeping demand recovery uncertain in the near term.
Crisil said newer strains of the virus, the scale of vaccinations and subsequent revival in demand will be among the key monitorables for fiscal 2022.