“Large players saw muted revenue growth. However, small players, which are typically low on bargaining power and cash-crunched remained in the red. The smaller the company, the more excruciating the pain” said a report by the ratings firm.”Indeed, less than 20% of the smaller 400 companies logged revenue growth, as against nearly 35% of the top 100 companies that grew in the first half of the fiscal”.
An analysis by the research arm Crisil indicated that revenues of Indian corporates India – excluding oil companies, banking, financial services and insurance– remained stable on-year in the second quarter of FY’21, after having contracted 29% year-on-year in the first quarter.
In consumption- and commodity-linked sectors, most large players logged growth in the second quarter, while their smaller counterparts saw their business contract.
Among exporters, smaller textile businesses – readymade garments and cotton yarn – suffered chronic pain, while IT services showed resilience with both large and small players showing steady sequential growth, Crisil said.
For the Corporate sector as a whole, aggregate earnings before interest, tax, depreciation and amortisation (Ebitda) rose 15% year-on-year in the second quarter amid improving utilisation levels, along with better management of power, fuel and raw material cost by large companies. Ebitda fell 32% in the previous quarter.
Absolute Ebitda profit hit a 12-quarter high in the second quarter of fiscal 2021. Aggregate margins, too, improved by over 100 bps ( one bps is 0.01 %) despite a rise in raw material cost during the period. Despite debt levels remaining stable, interest cost reduced due to lower cost of debt and lack of utilisation of working capital limits amid weak demand.