Growth in corporate revenue – excluding that of banking, financial services & insurance and oil companies – is likely to print at ~9% on-year for the fourth quarter of fiscal 2018, CRISIL Research’s analysis of over 400 companies, which account for 65% of the market capitalisation of the National Stock Exchange shows. That’s slower than the 12-quarter high of 10.9% seen in the third quarter, which had benefited from low-base effect following demonetisation in the corresponding year-ago period. The slowdown is largely on account of higher base for consumption-linked sectors, which had partially recovered from demonetisation in fourth quarter of last year. Operating profitability or earnings before interest, tax, depreciation and amortisation (EBITDA) margin, meanwhile, is expected to come in at a 12-quarter low of 18.6%. The pace of margin contraction, though, is seen easing to around 50 bps on-year from 100-250 basis points (bps) in the previous four quarters. Says Prasad Koparkar, Senior Director, CRISIL Research, “Second half of fiscal 2018 will end at a double digit mark, mainly led by consumption and commodity linked sectors. Volume growth is clearly evident across consumption linked sectors. Sequentially a number of sectors would show growth lower than the third quarter as low base benefits reduce. While margin pressure continues with higher commodity prices, operating leverage benefits would cushion the impact on margin to some extent.”
