As per the report, revenue growth for Indian corporates (excluding financial services and oil firms) is expected to come in at a subdued 7-9 per cent Y-o-Y for the quarter ended March 31. Export-oriented sectors will continue to witness robust revenue growth, led by rupee depreciation, while in infrastructure-and investment-linked sectors, growth will be subdued owing to a weak investment climate, the Crisil Research report said.
The revenue growth is expected to improve to 11-12 per cent in FY15 with implementation of stalled projects recovery in industrial output with increasing domestic and export demand as well as improving consumer sentiment, it said.
"Revenue growth and operating profitability have bottomed out and will now gradually improve, assuming that a stable government will be in place post-election.
"Revival of stalled projects post the policy initiatives undertaken over the last 12-18 months, recovery in industrial output due to increase in demand and higher growth in exports led by improvement in global GDP will enhance revenue growth to 11-12 per cent in 2014-15," Crisil Research President Mukesh Agarwal said.
Overall revenue growth will continue to be supported by sectors such as IT, pharma, readymade garments and cotton yarn, which benefit from currency tailwinds. Despite recent gains against the dollar, the rupee's average exchange rate during Q4, FY14 was nearly 14 per cent weaker Y-o-Y, it said.
The overall income of public sector banks is expected to slow down to 9-10 per cent Y-o-Y in Q4 as against 11 per cent increase seen during the same quarter last year due to weak credit growth, rising proportion of non-earning assets in their portfolio of banks in addition to pressures of interest rate pricing. The weak growth in advances will cause the slower growth in interest income, Crisil said.
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