Crisil Research expects India Inc's EBITDA (earnings before interest, taxes, depreciation, and amortisation) margins to remain firm in the third quarter (October-December) of the current fiscal despite continuing pressure on demand growth, said a press release issued by Crisil on Wednesday.
EBITDA margins (excluding banks and oil & gas companies) are estimated to improve marginally by 10-30 basis points (bps) on a y-o-y basis in third quarter of FY13 while revenue growth is expected to be muted at 11-13%.
Mukesh Agarwal, president, Crisil Research, said: “We believe that revenue growth will remain under pressure due to weak consumer sentiment and sluggish investment cycle. Slower volume growth is likely to constrain revenue expansion, mainly in sectors such as automobiles, FMCG, capital goods and metals. On the other hand, EBITDA margins will be supported by increasing realisations and softening prices of commodities such as coal, rubber and cotton. In addition, stringent cost control by corporates across sectors would further cushion margins.”
According to Crisil Research, volume growth is estimated to be muted in third quarter FY13 with 17 out of 28 key sectors (excluding banks and oil & gas companies) expected to witness negative or low single digit growth due to continued macro-economic pressure.
Weak consumer sentiment would result in subdued demand in sectors such as two-wheelers, retail, textiles and housing. Fall in both corporate and leisure travel will affect hotels and airlines. Moreover, investment-linked sectors such as capital goods, steel and cement would witness volume pressure due execution delays mainly in the power, construction and infrastructure sectors, said the release.