Street sees modest growth of India Inc's topline in FY24

WITH CONSUMER DEMAND expected to stay muted, analysts expect India Inc to report a modest topline growth in FY24 driven by the good performance of banks and the automobile sector.

Operating margins, however, are tipped to expand as prices of key commodities soften. Analysts at Kotak Institutional Equities expect the net profits of the Nifty-50 Index to grow at an estimated 12.6% in FY24 and 15.2% in FY25.

Softer prices of key inputs are expected to boost corporate India's margins in the current year even as demand, especially for consumer products remains sluggish, impacting the topline. Analysts at Jefferies noted that consumption demand trends remain weak overall, including in rural India. While some companies saw a pick-up in volumes in Q4FY23, for many the growth was similar to that seen in previous quarters.

"Commentary and confidence on pickup in growth was mixed," Jefferies wrote.

The subdued consumption demand is corroborated by the anaemic 2.8% year-onyear increase in Private Final Consumption Expenditure (PFCE) in Q4FY23 on the back of a 2.2%y-o-y growth in Q3FY23.

Easing inflation, analysts said, should help sustain the current level of demand in urban areas and revive demand in rural India unless the monsoons turn out to be weak.