Corporate earnings to remain firm in Q3, says Crisil

Crisil Research says that Indian companies are likely to see their EBITDA (earnings before interest, taxes, depreciation and amortisation) margins staying firm in October-December 2012, despite continuing pressures on demand growth.

The EBITDA margins (excluding banks and oil & gas companies) are expected to improve marginally by 10-30 basis points (bps) on a year-on-year basis in the third quarter of 20012-13, while revenue growth is expected to be muted at 11-13 per cent, Crisil said in a note circulated today.

"EBITDA margins will be supported by increasing realisations and softening prices of commodities such as coal, rubber and cotton," Mukesh Agarwal, president at CRISIL Research, said.

"In addition, stringent cost control by corporates across sectors would further cushion margins."

However, overcapacity is expected to dent margins for hotel and shipping companies, while high input costs will drag profitability in paper and petrochemicals.

Sectors such as sugar, tyres, cement and airlines would see an expansion of over 250 basis points year-on-year in EBITDA margins due to higher realisations, Prasad Koparkar, senior director, CRISIL Research, said.