May Drop To 14% From 17.5% A Yr Ago: Crisil
Mumbai: India Inc is expected to see a sharp slowdown in revenue growth during the current quarter, growing at 14%, the slowest in the last six quarters, compared to 17.5% during April-June 2011. The main reasons for the slowdown are the moderation in demand during the current quarter, the general slowdown in the economic activity and also in gross fixed investments, a report by Crisil Research noted.
"EBITDA (earnings before interest, taxes, depreciation, and amortization) margins are projected to decline by 100-150 basis points (bps) on a yearon-year basis to around 19-20%, but remain flat compared to Jan-Mar 2012 (Q4 FY12)," the report pointed out.
The revenue outlook for the full year 2012-13 (FY13) is also not so good as there are indications that it would grow at a pace slower than what was witnessed in FY12, that is lower than 16.7%, unless investments pick up. On the margin front, however, export-driven sectors like pharmaceuticals and IT companies would see some margin expansion, along with the telecom sector, which is purely domestic market focused.
Crisil Research also noted that there is a sharp deceleration in investment cycle, as investments in fixed assets are currently at the lowest level in the last five years. "At about 13%, growth in capex is the lowest in the last five years, reflecting investment slowdown. Deceleration in investment has lowered depreciation charges to a 10-year low," the report pointed out. Crisil analysts also are not expecting the investment cycle to pick up soon because of three reasons. These are the current economic uncertainty and the flux inthe Eurozone, continued policy logjam, delays in approvals and clearances, land acquisition related issues etc, and some likely delay in moderation of interest rates due to high fiscal deficit and inflation.
India Inc's interest coverage, the ratio of EBIDTA to interest expenses, is also at the lowest level in the last three years, because of high interest rates and margin pressures.
E-voting must for resolutions: Sebi
Mumbai: Market regulator Sebi on Tuesday said that e-voting should be mandatory for top 500 companies by market capitalization on the BSE and the NSE, making it cost effective for these companies and easier for their shareholders to participate in some of the decisions which were earlier done through postal ballot. The decision came as a follow-up to the Budget proposal to make e-voting mandatory for listed entities. Sebi said that the decision to move to e-voting would be implemented in a phased manner, and listed companies may choose any one of the agency which is currently providing the e-voting platform. TNN  |
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