Annual growth of India Inc in the fiscal year 2020 may be the lowest in the last four years. The slowdown in growth due to low demand in the first nine months of the current financial year and the high base of double digit revenue growth in the same period of the previous fiscal year may deteriorate their movement.
According to the analysis of BSE 500 companies conducted by ETIG, the revenue growth of the companies included in the sample has been 2.4% between April and December in the current financial year. This is the lowest since FY16. In the absence of large turnaround signals, it will be difficult for sample companies to drive revenue growth beyond the 17.5% they achieved in FY19. Due to this, their revenue growth could be weak in FY2020.
The ETIG sample consists of 423 companies issuing financial results since FY2014. These companies had strong growth net sales of 29.3% in the first nine months of FY19. In comparison, the sales growth of sample companies has been very low in the current financial year due to weak performance of companies from various sectors including auto and ancillary, cement, construction, metal and oil and gas.
