CRISIL SME TRACKER MSMEs

Exports to key destinations such as North America, however, are expected to be hit by US tariffs.

Despite this, growth is still projected to exceed decadal averages and will continue to be aided by demand from infrastructure and construction segments

In FY24, state spends are expected to go up further by 8-12 per cent as their percentage achievement of budgetary allocations are expected to be largely in line with historical average

In the next financial year, the revenue is expected to grow 9-11 per cent as Lok Sabha elections in April-May are expected to boost demand

The Indian steel sector has enjoyed a multi-year demand surge which will continue in the current FY'24 but it is expected to moderate in the coming fiscal, global analytics company Crisil said. The sector has witnessed double digit demand growth rate of 11 to 13 per cent during three consecutive years and is likely to moderate to 3 to 5 per cent in FY'25, Miren Lodha, Director Research, Crisil Market Intelligence and Analytics said on Friday. "We are clearly in the midst of a demand supercycle," Lodha told PTI. The moderation is likely in the long steel segment in FY'25 ahead of the general election. The only other instance of such a demand surge in the last two decades was between 2006 to 2008, he said. Lodha said the infrastructure sector, a key driver of the steel demand, is expected to maintain its momentum fuelled by ongoing government projects. The infrastructure segment has been driving a lot of momentum in the steel demand and is expected to continue in the coming years.

More tailwind is expected from the travel segment, which is poised for double-digit revenue growth, further augmenting ITeS growth

But growth will still be healthy as discounts and lower retail prices will cushion the fall

Globally, supply is expected to ease as output in Brazil and Thailand, both major producers, is likely to revive

MSMEs in the automotive components sector should see higher growth as well, but will lag average industry revenue growth owing to lack of vertical integration.

Consumption of electronics in the domestic market is estimated to grow 15-20 per cent to Rs 11-12 trillion, compared with 18-22 per cent growth last fiscal

The sector operates in three key segments -- customer relationship management (CRM), knowledge, and transactions.

Small and medium enterprises (SMEs), which make up as much as 30-35 per cent of the industry, have been hit particularly hard

Long constrained for liquidity, MSMEs now also have to cope with loss of demand, labour shortage, and heightened risk aversion in the financial system due to the Covid-19 pandemic.

The extended lockdown to stem the spread of the Covid-19 pandemic has disrupted supply chains and hampered factory operations.

Small and medium enterprises (SMEs), which account for nearly a third of the industry's revenue, with a varying share in different segments, are expected to be hit hard

In fiscal 2020, CRISIL Research expects domestic demand for specialty chemicals to remain robust, driven by key end-user industries

Agrarian states have a higher percentage of working age population, a chunk of it based in rural areas

CRISIL's analysis shows that the price of kraft paper, which accounts for about 60 per cent of input cost, has surged 12 per cent this fiscal on supply constraints

Micro, small, and medium enterprises (MSMEs) which plough back profits into the business tend to grow faster, compared with peers that don't. CRISIL's analysis of 3,000 rated MSMEs registered as proprietorships and partnership firms shows that 41 per cent had retained profits in 2014-15. The internal accruals allowed these units to manage a prudent mix of debt and equity to fund expansion/modernisation and meet increased working capital requirements. This enhanced their image with lenders, compared with peers which withdrew profits from the business, and allowed these units to raise 20 per cent higher borrowings.Better availability of capital, in turn, led to enhanced capacities and faster revenue growth. In fact, in the three years through fiscal 2015, revenue growth of the firms which had retained profits was double the rate logged by their peers. Operating profit margin (OPM) improved, too. In fiscal 2015, average OPM of the firms which retained profits was 52 per cent higher, compa

However, within the segment, players with a longer track record have a greater chance of securing such funding