Low base drives up India Inc's Q1 revenues 17%

India Inc reported a 17.1 per cent growth in revenues for the June quarter on a lower base in the year-ago period, a report said Thursday. "Indian corporate sector's aggregate revenues have grown by 17.1 per cent during the first quarter (Q1FY19), on a year-on-year basis," domestic rating agency Icra Ratings said in a note.

The agency said it analysed 660 companies as part of the research and added that 26 of the 32 sectors it analysed have shown a revenue growth.

It said consumer-oriented sectors like auto, fast moving consumer goods, consumer durables, restaurants and airlines, and commodity-linked sectors like cement, iron and steel and oil and gas continue to do well, while sectors like capital goods, pharmaceuticals, media and fertilisers have also witnessed strong revenue growth.

"This growth has been achieved on low-base, adversely impacted by GST implementation in Q1 FY 2018 besides, healthy consumption-driven demand as well as pick-up in infrastructure spending," its group head for corporate sector ratings Shamsher Dewan said.

He, however, added that as compared to the preceding March quarter, the sales declined 2.4 per cent on seasonal factors.

Sectors that witnessed decent margin improvement were metals and mining (including iron and steel) due to up-tick in commodity prices and; the consumer food sector, supported by lower input costs like milk and sugar, the agency said.

Consumer goods, paints, FMCG and auto expanded their margins as they partially absorbed raw materials price hikes to mitigate the impact, it added.

Airlines, tiles and ceramics and cement sector witnessed significant erosion in margins due to rising fuel prices, while factors like subdued realisations (sugar), charter rates (shipping), decline in APRUs and rise in network costs (telecom) too exerted pressure on earnings of companies, it said.