In the first quarter (April–June) of the current financial year, Indian companies saw a slow revenue growth of about 4-6%, compared to around 7% growth in the last two quarters, according to a report by Crisil Intelligence.
Why the Slowdown?
The slower growth happened mainly because some key industries like power, IT services, and steel did not perform well. These sectors together make up nearly one-third of the total revenue of the 600 companies Crisil reviewed.
Despite the slowdown in these areas, other sectors performed well, helping to support overall growth. These include:
- Pharmaceuticals
- Telecom
- Organised retail
- Aluminium
- Airlines
What Affected Sector Performance?
Pushan Sharma, Director at Crisil Intelligence, said that the early arrival of monsoon and ongoing global uncertainties had a big impact on several sectors.
Here’s a look at how different sectors performed:
Sectors That Struggled:
- Power Sector: Revenue fell 8% due to cooler weather, which reduced electricity demand and lowered coal and spot electricity prices.
- IT Services: Revenue remained flat because global trade tensions caused project delays.
- Steel: Revenue grew only 1-3% due to lower prices and temporary plant shutdowns.
- Auto: Revenue rose 4%, helped by retail sales and exports, but high inventory limited the gains.
Sectors That Did Well:
- Construction: Revenue increased 6%, mainly due to the low base from last year’s election disruptions.
- Pharma: Revenue grew 9-11% due to strong export demand and steady domestic sales.
- Telecom: Revenue jumped 12%, thanks to higher subscription charges.
- Retail: Organised retail grew 15-17%, driven by strong sales in fashion and grocery.
- Aluminium: This sector saw the highest growth—23%—thanks to strong local demand, exports, and better product pricing.
- Airlines: Revenue rose 15% as more planes returned to service and fleets grew.
- Other Sectors: Moderate growth was seen in cement, FMCG, and steel due to higher sales volumes.
Summary:
Even though some sectors slowed down, strong performance in others helped maintain overall revenue growth for Indian companies in Q1. The outlook remains cautious due to weather conditions and global uncertainties.
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