The aggregate revenue of non-oil, non-BFSI (banking, financial services and insurance) companies in India could decline 8-10% assuming 1.8% GDP growth in FY21, said research and rating agency Crisil. The downside could be worse, the agency said, with revenue declining between 12-15% if GDP growth remained flat.
The country is likely to permanently lose 4% of its GDP or Rs 9 lakh crore in nominal value due to the Covid-19 pandemic, said Dharmakirti Joshi, chief economist at Crisil.
The construction sector, which is one of the biggest employers in the country as it is a labour-intensive sector, faces high risk, Joshi said. Protecting India’s workforce will be a major challenge for the policymakers, he added.
Discretionary segments too would be heavily impacted. Industries like aviation, hotels, media, and organised retail could see revenue decline by 20% if the GDP grows by 1.8%, said Prasad Koparkar, senior director, Crisil Research. If GDP growth remains flat, these sectors can see a revenue fall of upto 30%.
Meanwhile, discretionary product industries like automobiles and consumer durables could see their revenues dip by 12% and 22% in the above two scenarios, respectively. The decline predicted for the construction sector was between 11% and 15%.
The Ebitda of India Inc could dip between 15-18% for a 1.8% GDP growth and between 25-30% for flat GDP growth. The predictions were based on trends for over 800 listed non-oil, non-BFSI companies.
“The impact would be the highest for micro and small companies,” Koparkar said.
Joshi said that the policy response to contain the economic fallout from the lockdown was robust, but the fiscal support was inadequate. The government should give fiscal support to the tune of Rs 3.5 lakh crore to prevent industries from going bust, Crisil predicted.