Corporate revenue likely increased 5-6% on-year during the January-March quarter of fiscal 2025 - apace with the preceding quarter - following an improved showing by the consumer-driven sectors (excluding staples).

For the full fiscal 2025, the overall revenue growth is estimated at ~5%.

The overall earnings before interest, tax, depreciation and amortisation (Ebitda) is seen up ~8% on-year, which would mark an improvement of 40-60 basis points (bps) on-year.

This is indicated by our analysis of 400+ companies that account for almost half of the market capitalisation of the National Stock Exchange.

Says Pushan Sharma, Director, Crisil Intelligence, “The consumer discretionary products, services and staple services segment is expected to see 8-9% on-year increase in revenue. This would be led by an expected 15% surge in telecom services revenue resulting from significant tariff hikes implemented in the second quarter and the introduction of premium 5G plans by telecom operators. The retail segment likely saw a robust 17% growth, led by demand in the value fashion, and food and grocery segments, as well as an expansion of store networks. The automobile sector’s revenue likely grew ~6% as retail momentum for passenger vehicles picked up and realisations rose owing to a change in the product mix and increasing share of exports.”

In consumer staples, the fast-moving consumer goods (FMCG) segment is expected to see 4-6% revenue growth led by price hikes amid subdued volume growth. While rural demand has been resilient, urban side has stayed subdued.

Overall exports revenue likely grew ~4%. IT services revenue is estimated to have grown 2-3% following a marginal improvement in demand and project pick-ups. The pharmaceutical sector revenue likely grew 8% on robust demand in the regulated markets such as the US and Europe, as well as in the semi-regulated ones in Africa.

Revenue of the agriculture sector, including fertilisers, likely grew 17-19% with consumption improving following a stable summer crop acreage and higher disposable incomes stemming from better yields and remuneration for kharif paddy.

In construction-linked sectors, revenue growth is seen limited to 1-2% as cheaper steel imports throughout the year resulted in lower prices on-year. However, steel prices have improved sequentially after the announcement of safeguard duty. The cement sector revenue likely grew 3% on a high base, as pricing remained subdued owing to industry consolidation and lower realisations.

In industrial commodities, the coal segment revenue likely grew only 1-2% despite increased power demand because of unusually high temperatures in the western and southern regions because of a fall in e-auction premiums.

In the investment-linked sectors, the power segment saw increased demand owing to unseasonably warm January and February and above-normal temperatures in March. However, revenue growth was likely limited to 2-3% due to the impact of revised Central Energy Regulatory Commission transmission tariffs.

The aluminium sector likely saw 17-19% revenue growth on higher global prices and demand from North America.

Says Elizabeth Master, Associate Director, Crisil Intelligence, “The top 10 sectors, which collectively account for over 70% of revenue, showed a mixed trend in Ebitda margins. Five, including export-driven ones such as pharmaceuticals, investment-linked ones such as power, and consumer discretionaries such as telecom services, likely saw margin expansion. Ebitda margins in pharma likely rose a significant 150-200 bps as input costs moderated. On the other hand, five sectors — automobile, IT services, FMCG, cement, and steel - saw margins decline. The automobile sector’s Ebitda margin fell ~100 basis points following a 25% increase in aluminium prices driven by inventory decline and supply concerns in various global regions.”

The margin in IT services is estimated to have fallen 30-40 bps on-year owing to higher marketing and travel spends. The FMCG sector margin likely slipped 50-100 bps on increased cost of essential inputs such as palm oil, tea and dried coconut kernels. While palm oil prices rose following the import duty hike in September 2024, tea prices surged owing to reduced production in key regions, such as Assam and West Bengal, which led to a supply shortage. A shortage of dried coconut kernel in key producing regions, particularly Tamil Nadu, drove up its prices. Meanwhile, in the cement and steel sectors, despite robust demand and easing cost pressures, lower realisations resulted in margin contraction.

In the consumer discretionary, telecom services margin likely surged 300-350 bps, driven primarily by reduced spectrum charges. This was a result of the growing adoption of 5G technology, which has a lower spectrum usage charge of 8% of adjusted gross revenue, compared with 11% for 4G. Additionally, improved bargaining power on tower rental costs further supported the margin.

Within the investment-linked segments, the power sector’s margin likely expanded 200-250 bps, driven by a decline in international coal prices that, in turn, led to lower operating expenses.