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India Inc’s Q1 revenue growth to touch 6-quarter low says CRISIL

According to the ratings agency, revenue growth in the April-June quarter is forecast to drop to around 14% from 17.5% a year ago, given the slowdown in economic activity and gross fixed investments

 

Mumbai: With 15 out of 26 sectors facing severe margin pressure due to higher interest cost and slowing sales in the current quarter, ratings agency CRISIL said it expects revenue growth of leading corporates to report their weakest quarterly numbers in the past six quarters, reports PTI.

"While policy logjam and higher cost of capital have severely dented the investment cycle, persistent inflation, economic uncertainty and high retail lending rates are weighing on consumer sentiment, thereby affecting consumption growth. We believe demand growth will continue to remain weak going forward, as interest rates are likely to remain high for longer than anticipated. The deceleration in fixed capital investments growth may lead to further slowing of consumption demand,” said Mukesh Agarwal, president, CRISIL Research.

Revenue growth in the April-June quarter is forecast to drop to around 14% from 17.5% a year ago, given the slowdown in economic activity and gross fixed investments. "Accordingly, earnings before interest, taxes, depreciation and amortisation (EBIDTA) margins are projected to decline by 100-150 basis points (bps) or 1-1.5 percentage points on a y-o-y to 19-20%, but remain flat compared sequential (Q4 of FY12)," CRISIL said in a report.

Although, overall EBITDA margins are expected to remain flat for Q1 FY13 on a q-o-q basis, 15 of the 26 sectors will continue to face margin pressure. “For sectors like commercial vehicles, cement, construction and real estate, EBITDA margins are forecast to contract by 100-200 bps q-o-q, due to slower demand growth and high input costs,” said Prasad Koparkar, senior director, industry and customised research.  

The revenue growth in first quarter (Q1) of FY13 is expected to be much weaker due to a sharp deceleration in airlines, auto components, commercial vehicles, hotels, metals, organised retail, real estate and textiles, the ratings agency said.

The report is based on the analysis of aggregate financial performance of 247 large companies across 26 key sectors, excluding banks and oil & gas companies and constitute around 65% of the BSE 500 Index.

On the other hand, export-oriented sectors like IT services and pharma are expected to report strong q-o-q margin expansion aided by a 7.4% q-o-q fall in the rupee, the agency said, adding the telecom sector is expected to see a modest expansion in margins on account of lower competition coupled with cost control measures adopted by the companies.

The ratings agency also said reflecting weak demand due to the ongoing slowdown, y-o-y revenue growth in Q4 of FY12, moderated slightly to 17.2 from 17.7% in the same quarter previous year, while EBIDTA margins fell 270 bps y-o-y, which however was higher by 35 bps q-o-q, largely due to strong seasonal performance by commercial vehicles, construction, power, cement and sugar sectors.

Accordingly, net margins rose by 90 bps q-o-q, supported by the decline in depreciation charges.

Depreciation charges as a percentage of revenues fell to its lowest level in the last 10 years while growth in fixed asset creation was at its lowest in the last five years, reflecting the sharp deceleration in the investment cycle, said the agency.

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BHEL wins Rs950 crore contract from Bhutan

The order envisages manufacture, supply, erection and commissioning of the electro-mechanical equipment for the 1,020 MW Punatsangchhu-II Hydroelectric project

 

New Delhi, June 26 (PTI) State-owned BHEL on Tuesday said it won a contract worth Rs950 crore for supplying equipment for 1,020 MW hydel project in Bhutan, reports PTI.

"BHEL has secured a contract from Punatsangchhu Hydroelectric Project Authority (PHPA), Bhutan for the electro-mechanical equipment package for a 1,020MW (6x170 MW) Hydroelectric project in Bhutan," the company said in a statement.

"Valued at Rs950 Crore, the order envisages manufacture, supply, erection and commissioning of the electro-mechanical equipment for the 1,020 MW Punatsangchhu-II Hydroelectric project," it said.

BHEL is also executing the 1,200 MW Punatsangchhu-I project in Bhutan. It is being set-up under a bilateral agreement between India and Bhutan.

Located around 80 Km from Thimphu on the banks of the Punathsangchu River in Western Bhutan, the project is an environment friendly run-of-the-river scheme.

BHEL has, so far, executed three hydro projects -- 336 MW Chukha, 60 MW Kurichu and 1,020 MW Tala in Bhutan. These projects account for nearly 95 per cent of the total power generating capacity in Bhutan.

For this contract, the six turbines and generators of 170 MW each and associated equipment will be manufactured and supplied by BHEL's Bhopal facility while the Control system will be manufactured and supplied by the company's Electronic Division at Bangalore.

BHEL has established its footprints in six continents of the world spanning over 75 countries. This contract will further strengthen BHEL's presence in the overseas Hydro business segment, the company said.

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SBI says need for more equity investment and raising exports

According to SBI chairman there is a need for more equity investment in the country and enhancing capabilities for raising exports

 

Bhopal: State Bank of India (SBI) chairman Pratip Choudhary has emphasised the need for enhancing equity and foreign investment in the country, besides taking measures for raising exports, reports PTI.

"There is a need for more equity investment in the country and enhancing capabilities for raising exports as at present we import more and export less," the SBI chairman told reporters while commenting on the measures taken by the Reserve Bank of India (RBI) to arrest the slide of the rupee.

Choudhary, who earlier addressed SBI officers at its regional headquarters, said, "These are short-term measures while the country needed steps for a long-term growth."

Refusing to comment on the Indian economy, he said that government only could say anything about it but he insisted on raising foreign investment in the country.

Referring to the ongoing merger process of associate banks with the SBI, he said it will be done in a gradual manner, one every year and not all of them together.

The associate banks slated to be merged with SBI are State Bank of Patiala, State Bank of Hyderabad, State Bank of Mysore, State Bank of Bikaner and State Bank of Travancore.

On the issue of appointments in SBI, he said the process would be completed by Dussehra and added that this year the bank would make 9,500 clerical level appointments and appoint nearly 1,000 probationary officers.

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