Revenue growth in April-June 2012 (Q1 FY13) is forecast to drop to around 14 per cent from 17.5 per cent in Q1 FY12, given the slowdown in economic activity and gross fixed investments.

EBITDA (earnings before interest, taxes, depreciation, and amortisation) margins are projected to decline by 100-150 basis points (bps) on a y-o-y basis to around 19-20 per cent, but remain flat compared to Jan-Mar 2012 quarter (Q4 FY12).

Reflecting the weak demand on the back of economic slowdown, the year-on-year (y-o-y) revenue growth in January-March 2012 (Q4 FY12) moderated slightly to 17.2 per cent from 17.7 per cent in the same quarter last year. Although the EBITDA margins fell 270 basis points (bps) y-o-y, they improved by 35 bps q-o-q, largely driven by the seasonally strong performance of sectors such as commercial vehicles, construction, power, cement and sugar.

Notably, net margins rose by around 90 bps q-o-q, supported by the decline in depreciation charges.

Depreciation charges as a percentage of revenues fell to its lowest level in the last 10 years while growth in fixed asset creation was at its lowest in the last five years, reflecting the sharp deceleration in the investment cycle. The analysis is based on the aggregate financial performance of 247 large companies across 26 key sectors.

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