Growth to moderate to 3-5% in fiscal 2024 due to looming macro-economic headwinds in key overseas geographies
Domestic demand to remain steady; correction in realisations to moderate revenue growth
Global macro-economic headwinds to impact exports, which account for ~42% of sectoral revenue
Long term growth drivers comprising of supplier diversification strategy by global players (China+1 and Europe+1) remain intact
Operating profitability to further contract to 9-10% after seeing a ~350-basis point (bps) decline in fiscal 2023
Moderating capacity utilization owing to demand headwinds in key export geographies followed by downward pressure on realisations due to Chinese dumping to result in gross margin contraction; inflationary pressure on fixed costs to also have bearing on operating margins
Any significant movement in crude prices will bear watching
Capital expenditure (capex) step-up seen in fiscal 2024
Capex of ~Rs 11,500 crore estimated in fiscal 2024; ~Rs 10,500 crore was spent in fiscal 2023
Focus also on value-added downstream projects
Credit outlook to remain Stable
Strengthening business risk profiles over time have enhanced ability of players to withstand volatility in end-user segments/input prices
Steady accrual and prudent funding of capex will keep debt protections metrics healthy
Analytica