Winning Bizness Desk

Mumbai. The profit margins of Indian companies are expected to decline in the third consecutive quarter (April-June- 2022), a unit of Crisil Ratings said on Monday. Crisil Research has come to this conclusion after analyzing 300 companies excluding financial services and the oil and gas sector. The agency said operating profit margins for the June quarter may decline by 2-3 percentage points on a year-on-year basis. Margins are expected to fall in about half of the 47 sectors during this period.

Growth of 30 percent on an annual basis

It has been said in the report that in the first quarter of the current financial year, the revenue of the companies is expected to register a good growth of 30 percent year-on-year. This is due to increase in prices and marginal increase in quantity. During the quarter under review, geopolitical tensions and record depreciation in the Indian rupee have faced adverse conditions. This has had an impact on the quarterly results.

Biggest drop in operating profit margin

The agency said that the operating profit margin is expected to decline the most by more than 9.90 per cent in the construction-related sectors. After this, the investment related segment may decline by more than 2.60 percent. On the other hand, operating profit margins for consumer discretionary services and products are expected to grow by up to three per cent. This is mainly due to the better performance of aviation services. Apart from this, the performance of Telecom and Media and Entertainment segments will also be good.

EBITDA margin expected to decline

Hetal Gandhi, Director, Crisil Research, said that the income before interest, tax, depreciation and amortization ie EBITDA margin may come down to 19-21 per cent in the current financial year. This will be mainly due to increase in the prices of fuel and metals.