India Inc to see double-digit growth in revenue in FY24, even as GDP slows: Crisil

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India’s economy will grow at a slower pace in FY24 than it did in this fiscal but corporate revenue will see a double-digit growth, ratings agency Crisil has said. It expects FY24 GDP growth to slow down to 6 percent from 7 percent in FY23.

Despite weaker growth, caused by sluggish exports and the lagged effect of the rate hikes, India Inc’s revenue is expected to grow by 9-11 percent year-on-year (YoY) to Rs 56.3 trillion in FY24E from Rs 51.2 trillion in FY23E.

It will be driven by domestic demand and the 10-12 percent YoY rise in non-commodity sectors, Crisil said in its latest report.

The resilient performance from the companies will come on top of the 16-18 percent YoY growth their toplines saw in FY23, which was also led by the non-commodity segment and over a “whopping” 25 percent rise in FY22 on the back of a commodity “super cycle”.

The so-called commodity super cycle may have peaked in FY22, when the sector’s revenue touched a decadal high of 21 percent from compared an average of 17 percent seen between FY18 and FY 21, the report said.

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Outperforming sectors

In FY24, sectors that will drive revenue growth will be different from the ones that did in FY22. In FY24, consumer discretionary, construction and commercial-linked sectors will drive revenue versus FY22’s commodities and consumer-staple sectors.

“Consumer discretionary services have recorded a healthy recovery from the pandemic, led by pent-up demand, and will be a major growth driver in fiscal 2024,” said the report.

Also read: Will private investment spur economic growth in FY24?

“In close pursuit will be commercial-linked sectors, driven by healthy demand from manufacturing and other economic activities, and the construction sector, driven by the 28 percent rise in capex outlay by the central government for fiscal 2024,” it added.

Corporate revenues are expected to show a marked improvement in FY24 from other post-pandemic years.

“About two-thirds of India Inc’s sectoral revenue in fiscal 2024 is expected to be more than 50 percent above the fiscal 2019 level, signifying a healthy recovery from the pandemic. In comparison, in fiscal 2023, only about 41 percent of the sectoral revenue would be more than 50 percent above the fiscal 2019 mark,” stated the report.

Sectors that have recovered best from the pandemic include pesticides, which is expected to post 2.35x its FY19 revenue in FY24; power distribution (2.09x) and power generation (1.93x).