The financial year 2023 will be remembered for years in terms of the global market or rather the global economy. Why in this fiscal year the effect of Ukraine-Russia war was seen all over the world. Due to the sanctions on Russia, the condition of Mainland Europe and Britain appeared critical. America's banks started sinking and the danger of default on the American government started looming. Leave aside the talk of Sri Lanka, Pakistan or other countries, the exports of India, which were different goods in America, Britain and other countries of Europe, in which the most important diamond was happening, that too had fallen. After that, Indian companies, also known as India Inc, saw a growth of more than 11 percent in the last quarter of the financial year as compared to the previous year. Let us turn the pages of that report of the rating agency and try to see how the growth of India Inc. has been seen.
Which sectors showed growth
According to the report of rating agency Icra, India Inc has achieved revenue growth of 11.4 percent in the last quarter of FY 2023 as compared to the same period of the previous financial year. According to the report, analysis of 579 companies listed in the stock market shows that this growth is due to increase in demand and price hike by companies of all sectors. By the way, in the report of ICRA, it has also been informed that the revenue growth has decreased by 5.2 percent as compared to the third quarter of the financial year 2023. By the way, the major sectors that grew revenue in this last quarter include aviation sector, hotels, ports and gems and jewellery. However, India Inc's operating profit margin (OPM), which is the ratio of operating profit to revenue of a company, declined 1.26 per cent year-on-year during the quarter.
OPM decreased even after the inflation pressure decreased
According to analysis by ICRA, Bharat Inc's operating profit margin (OPM) declined 1.26 per cent year-on-year in the last quarter, despite easing inflation pressure, said Kinjal Shah, Vice President and Co-Group Head, Corporate Ratings, ICRA. Done. The reason for this was the increase in conversion cost. Foreign currency rates were also not favorable for the country on a year-on-year basis. However, OPM was up 0.58 per cent sequentially due to softening commodity prices and increase in prices by companies during the quarter. Despite this, geopolitical uncertainties remain a threat to margins.
Margin pressure likely to ease
Shah further said that selective sectors such as iron and steel, cement, oil and gas, and consumer durables were witnessing the maximum expansion in margins. While margin pressure is likely to ease in the coming quarters, much of the recent softening in commodity prices remains due to uncertainty over geo-political conditions. Therefore, despite some moderation and stabilization in commodity prices in recent months, India Inc's earnings recovery will depend on bearish trends in developed markets and the impact of foreign currency fluctuations on import as well as export-oriented sectors. will do
On what will the improvement in overall performance depend?
The ICRA report states that the improvement in the overall performance of India Inc will depend on how well the organizations are able to deal with adverse conditions going forward. According to the report, stabilization of input costs and easing of supply chain hurdles like semiconductor chip shortage as well as price hikes by entities across sectors will pave the way for margin recovery in the coming quarters.
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