‘India Inc’s Q2 margins to fall 100 bps’

Slower growth,higher costs and wages would compress margins,Crisil Research said.

Slower volume growth,higher raw material costs and wages would compress Indian companies’ margins in the second quarter (Q2),Crisil Research said on Monday.

The research house expects India Inc margins to be 100 bps lower from 18.5 percent registered in April-June,with sharp declines expected for automakers,realtors,textile and steel manufacturers on slower offtake and higher input costs.

Revenue growth is expected to slow to 15 percent,from 22 percent in the year-ago quarter,Crisil said,based on its analysis of the financial performance of select companies across 21 industries,excluding banks and oil companies.

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Information technology service providers are expected to report a 17 percent jump in dollar revenue due to strong pipeline of contracts.

Despite the support from the rupee’s decline,their margins are slated to decline 200 bps owing to higher wages,Crisil said.

The Indian rupee has dropped about 11.5 percent from its peak in late July this year.

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