Growth remained tepid, but revived in Q3 2016-17 despite demonetisation
Revenue growth continued to remain tepid at 5.5% in Q3 2016-17 but was higher than that witnessed in the first two quarters of this fiscal. This was despite the impact of demonetization playing out during the quarter. An analysis of the performance of 390 companies across 50 sectors (excluding financial services and oil) shows that growth in Q3 2016-17 was primarily driven by the healthy performance of export-linked sectors – IT services and pharma, in particular – which grew at 9.7%. Moreover, continued government spending led to investment-linked sectors including capital goods, steel and aluminium witnessing the robust growth of 11.5%. However, other investment-linked sectors such as construction and cement fared poorly due to liquidity crunch on account of demonetization and high inventory.