Blitz Bureau
NEW DELHI: Led by revival in rural demand and uptick in Government spending, Indian companies are expected to clock a healthy 7-8 per cent revenue growth in the last quarter of current fiscal (Q4 FY25), a report showed on February 24. Further, the recovery in the operating profit margins (OPM) for India Inc witnessed over the past quarter is likely to be sustained at 18.2-18.4 per cent, supported by an increase in demand, led by improved consumer sentiments, said an ICRA report.
However, headwinds like the evolving global uncertainties, especially trade tariffs, can weigh on the growth levels, it mentioned. Coupled with lower interest costs, owing to the recent repo rate cut, this will result in a marginal expansion in the interest coverage ratio for India Inc. to 4.6-4.7 times in Q4 FY2025, against 4.5 times in Q3 FY2025.
“Rural demand is expected to be upbeat in H1 CY2025, aided by the robust output for most kharif crops and the favourable outlook for the ongoing rabi season,” said Kinjal Shah, senior vice president and Co-Group Head–Corporate Ratings, ICRA Limited. Beyond that, a normal and well distributed monsoon in 2025 is crucial to support the agricultural outcomes.
Further, after remaining sluggish over the last few quarters, urban demand is expected to improve, aided by the sizeable income-tax relief in the Union Budget 2025, the monetary easing by the Reserve Bank of India, and the expectations of a moderation in food inflation, which would augment discretionary consumption, he noted.
Evolution of the global economic and political scenario, movement in foreign exchange rates, impact of the new US President Donald Trump policies, pick up in government spending and a revival in the domestic urban demand would remain the key monitorables over the near term.
Certain sunrise sectors such as electronics, semi-conductors and niche segments within the automotive space like electric vehicles will continue to see a scale-up in investments, in line with the various production-linked incentives programmes announced by the government, said the report.
