A report released on Monday stated that India Inc. might hold an operating profit margin at 15-18 percent in the first quarter of FY25. ICRA pointed out that the watchables over the next few months would be the outlook for the global economy and the progress and impact of the monsoon in India.
According to Kinjal Shah, Senior Vice President and Co-Group Head–Corporate Ratings at ICRA Limited, " Fourth quarter of FY2024 has seen 5 percent year-on-year and 6.3 percent sequential growth in revenue for corporate India." He mentioned that such stellar growth is witnessed on the back of strong demand witnessed across consumer-facing sectors like airlines, hotels, automobiles, and FMCG segments. Power and construction sectors also showed excellent growth.
However, Shah pointed out that overall revenue growth was still somewhat tempered by lower realizations in the wake of reduced input costs—especially in the case of fertilizers and chemicals. These industries have also been hit by slowing demand because of destocking of channel inventories.
Looking ahead to the first quarter of FY2025, assuming marginal slowdown in growth vis-à-vis the previous quarter on account of a high base effect alongside short-term slowdown in infrastructural activities during the early part of the quarter due to general elections and dependency on monsoon-driven rural demand.
Y-o-Y improvement in OPM was witnessed for sectors like auto, power, pharma, and metals & mining in Q4 FY24, further aided by gradual price hikes and the easing of input costs.
In its totality, while India Inc. would further continue to post steady operating profit margins for the months ahead, it would be influenced at the same time due to the external economic dynamics and seasonal factors of the country.
Read also | IIFL Finance Reports 6% Decline in Q4 Profit to Rs 431 Crore
Read also | Oyo Plans $125 Million Funding Round, Valuation Set at $2.5 Billion: Report
