According to a quarterly corporate performance report by Crisil Intelligence, India Inc’s revenue growth is projected to moderate to 16% to 16.5% year-on-year in the September quarter (Q2), easing back from 17.4% in the June quarter (Q1). Despite this slight cooling in top-line expansion, aggregate profitability is anticipated to remain stable, supported by steady domestic demand and firmer commodity realizations.
Key Financial & Sector Highlights
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Stable Profitability: Aggregate Ebitda margins are expected to hold broadly steady sequentially at 18.2% to 18.6%, though this stability conceals significant divergence across different sectors.
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Growth Drivers: Domestic demand remained a primary anchor, with automobiles, power, metals, and consumer staples serving as the largest contributors. Export-oriented sectors also benefited from favorable currency translation effects and firmer commodity realizations.
Sector-Specific Performance Breakdowns
1. Automotive Sector (Uneven Momentum)
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Passenger Vehicles (PVs): Estimated to have grown by roughly 24%, fueled by an estimated 20% increase in volumes, product mix enrichment, and premiumization. However, PV Ebitda margins contracted by about 2.90% as manufacturers absorbed input-cost inflation to sustain volume momentum.
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Commercial Vehicles (CVs): Revenue grew by an estimated 21%, aided by steady freight activity, replacement demand, and an 18% increase in volumes.
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Two-Wheelers & Tractors: Showed signs of cooling momentum. Two-wheeler revenue growth slowed sharply to around 12% (down from over 36% in Q1), while tractor revenue growth moderated by approximately 2%. Two-wheeler margins contracted by about 1.50%.
2. Commodities and Metals (Strong Margins)
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Aluminium & Steel: Commodity producers reaped some of the strongest margin expansions. Aluminium margins surged by approximately 1,540 basis points, while blast-furnace steel producers saw margins expand by about 260 basis points. Domestic flat-steel prices averaged roughly 17% higher YoY, driven mainly by a 10% increase in realizations alongside a modest 2% volume growth.
3. Power, Cement, and Consumer Goods (FMCG)
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Power & Cement: Power generation revenue advanced by about 23%. Cement revenue grew more moderately at 9%, with average cement prices dipping 6% despite a 6% volume growth.
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FMCG: Consumer staples/FMCG revenue grew by 10.5% as companies increased prices and trimmed pack sizes to offset climbing input costs (such as edible oils). Margins contracted by roughly 100 basis points.
4. IT Services and Aviation
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IT Services: Revenue climbed about 12% in rupee terms, though currency depreciation played a major role in masking cautious underlying discretionary enterprise spending.
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Aviation: Faced the steepest profitability headwinds. Despite an 18% increase in fare realizations, passenger volumes declined by 4%. Combined with higher aviation turbine fuel (ATF) costs and capacity constraints, airline Ebitda margins plummeted by more than 1,200 basis points.
