Companies' margins seen firm in Oct-Dec despite slow growth - CRISIL

MUMBAI Wed Jan 2, 2013 4:18pm IST

A worker paints sifts used for cement filtration at a manufacturing factory in the industrial area of Kolkata June 12, 2012. REUTERS/Rupak De Chowdhuri/Files

A worker paints sifts used for cement filtration at a manufacturing factory in the industrial area of Kolkata June 12, 2012.

Credit: Reuters/Rupak De Chowdhuri/Files

Related Topics

MUMBAI (Reuters) - Indian companies are likely to see their EBITDA (earnings before interest, taxes, depreciation and amortisation) margins staying firm in October-December, despite continuing pressures on demand growth, CRISIL Research said in a note on Wednesday.

"EBITDA margins will be supported by increasing realisations and softening prices of commodities such as coal, rubber and cotton," Mukesh Agarwal, president at CRISIL Research, said.

"In addition, stringent cost control by corporates across sectors would further cushion margins," he said.

Excluding banks and oil and gas companies, EBITDA margins are estimated to improve marginally by 10-30 basis points year-on-year in the three months to December, while revenue growth is expected to be muted at 11-13 percent, CRISIL said.

However, overcapacity is expected to dent margins for hotel and shipping companies, while high input costs will drag profitability in paper and petrochemicals.

Sectors such as sugar, tyre, cement and airlines would see an expansion of over 250 basis points year-on-year in EBITDA margins due to higher realisations, Prasad Koparkar, Senior Director, CRISIL Research, said.

Lower input costs would result in higher margins for power generation, textile and tyre companies, he said.

Volume growth is estimated to be muted in the October-December quarter due to weak consumer sentiment and continued macro-economic pressures, CRISIL Research said.

India's economy grew 5.3 percent from a year earlier in July-September and is on track for its worst year in a decade.

(Reporting by Shamik Paul; Editing by Sunil Nair)

FILED UNDER:

Politics of Religion

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Chinese Economy

Chinese Economy

China revises up size of 2013 economy, sees no effect on 2014 growth.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage