Crisil Ratings in its report has said that after eight quarters of either decline or single-digit growth, corporate revenue grew in high double-digits of 15-17 per cent in the March quarter of FY21 to Rs 6.9 lakh crore, partly because of the low base and better realisation due to higher commodity prices, pushing up their operating profits by a much higher 28-30 per cent. The growth is led by construction-linked sectors like steel and cement which are estimated to have posted 45-50 per cent and 17-18 per cent on-year revenue rise, respectively, buoyed by higher realisations and volume.
It said with a visible recovery in the second half of fiscal 2021, the overall revenue may be just 50 bps lower than that of fiscal 2020. It mentioned that the estimates of 15-17 per cent revenue growth to Rs 6.9 lakh crore in Q4 of FY21 are based on an analysis of 300 companies, which account for 55-60 per cent of the market capitalisation (excluding financial services and oil companies) of the NSE, adding operating profit jumped be 28-30 per cent in the quarter.
The robust revenue growth rides on a low base of the year-ago quarter, besides higher government capex and higher realisations amid a commodity upcycle, among others. According to Hetal Gandhi, a director at the Crisil Ratings a closer look at the revenue breakup indicates 50 per cent of the recovery is contributed by automobiles, IT services and construction.