NOVEMBER 202319Ever since the pandemic began in CY2020, Corporate India's performance has fluctuated significantly, with new challenges arising and becoming more acute with each passing quarter. While domestic demand has clearly increased in all sectors this fiscal year, with robust YoY revenue growth, the profitability has remained under pressure due to the ongoing inflationary environment. In addition, there are indications of a slowdown in important industries due to ongoing geopolitical upheavals and global inflationary pressures, casting doubt on the export sector's pace. While supply-side issues have undoubtedly improved since the COVID-19-related disruptions, things still aren't back to normal everywhere just yet.According to an ICRA analysis of around 250 listed firms (excluding banking sector entities), the aggregate performance in H1 FY2023 has demonstrated favourable trends in sales, with Corporate India's aggregate revenues increasing by 35.2 percent YoY. This expansion was facilitated optically by the previous year's low base, which was affected by the pandemic's second wave. Furthermore, price increases across numerous industries as the demand climate stabilised, as well as the pass-through of inflationary pressures from input costs, aided growth. The secular increase was recorded across many industries on a YoY basis.However, revenue growth was softer on a sequential basis (compared to H2 FY2022), at 10.8 percent, with diverse trends recorded across industries. The higher realisations reflected the global economy's energy cost inflation and the heightened crude oil price trend, which was exacerbated by the Russia-Ukraine war. Revenue growth was accordingly the highest in the commodity-oriented sectors. However, while the oil and gas and power sectors witnessed a 30 percent and 38 Percent growth in revenues, respectively, vis-à-vis H2 FY2022 levels, GLOBAL HEADWINDS CONTINUE TO WEIGH ON CORPORATE INDIA'S EARNINGS IN THE CURRENT FISCALShamsher has over 14 years of experience in Credit Ratings Industry with focus on Managing Credit Rating Assignments for leading Indian companies, authoring numerous Industry Research Reports, developing Financial Models, Credit Risk Evaluation and Team Management.Shamsher Dewan Senior Vice President & Group HeadINDUSTRY INSIGHTSBy Shamsher Dewan, Senior Vice President & Group Head, ICRA
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