Clipped from: https://economictimes.indiatimes.com
The 5% contraction in the Indian economy as expected by CRISIL this fiscal – wrought by the Covid-19 pandemic – will significantly hurt MSMEs across sectors. Small real-estate contractors into EPC projects, and ceramics and textiles makers have been significantly impacted so their credit profiles are the most vulnerable.
MUMBAI: Revenue growth of small real estate developers and entities in engineering, procurement and construction (EPC) segment may halve in the current financial year with demand sliding even as rising costs, supply chain disruptions and labour issues exert severe pressure on margins, said CRISIL Research.
Small real-estate contractors into EPC projects, and ceramics and textiles makers have been significantly impacted so their credit profiles are the most vulnerable.
As for other sectors, MSMEs in consumer discretionary, and export-linked industries are expected to bear the brunt. The pain will radiate as Indian companies heads towards nearly 15% decline in revenue and around 25% fall in earnings before interest, taxes, depreciation and amortisation (EBITDA).
For MSMEs, the fall in revenue will be steeper at 17-21%, while EBITDA margin will shrink 200-300 basis points to 4-5% as weak demand gnaws away gains from lower commodity prices, CRISIL said.