India Inc to post 22 per cent growth in FYQ407

New Delhi, Apr 11: The top 300 Indian companies are expected to witness a bottomline growth of 20-22 per cent, while the sales growth will be in the range of 18 to 20 per cent in Q4 of the financial year 2006-07, a report said today.

The sectors such as cement, steel, capital good, telecom and FMCG are expected to take lead in the current earning season, an Assocham Eco Pulse (AEP) study on soon-to-be out fourth quarter results said.

In fact, margins in these sectors could well exceed 25 per cent, the industry chamber opined.

It also estimated a healthy topline and bottomline growth atleast for 300 firms which would be announcing results by the end of this week.

''Despite concerns by the Reserve Bank of India (RBI) and the Government, the Indian economy was able to absorb the inflationary pressures to a greater extent. Besides the average inflation for 2006-07 has been 5.3 per cent. The price rise has not impacted the demand for both consumers as well as manufactured goods,'' chamber President Venugopal N Dhoot said.

''Going forward, the fate of India Inc would largely depend on inflationary expectations and the RBI's stance on interest rates,'' added Mr Dhoot.

As per the analysis, cement companies are likely to witness a robust growth in the Q4FY07 as a whole on the back of strong volumes and high prices.

Steel is also expected to perform well benefiting from the rising prices. Assochan expects this sector to post margins exceeding 30 per cent.

The double digit manufacturing growth, aided by infrastructure development, has meant great times for capital goods sector. The margins for this sector as well could range between 25 and 28 per cent.

The FMCG sector would be driven by volumes, coupled with the fact that the firms were able to pass on the rise in raw material cost to the end consumers, it said.

The business environment is getting harder for banks and financial institutions with rising cost of deposits, liquidity crunch and enhanced provisioning requirements putting pressure on margins.

Accordingly, the burden may get reflected in the results.

It further said that the current financial year is not likely to be as promising as 2006-07. The impact of escalating interest cost and input prices is likely to be increasingly felt in the next fiscal, putting pressure on the margins of the companies.

Capacities too are expected to be strained, it added.

UNI