Firm commodity prices help India Inc fight note ban

Despite reverses of note ban, India Inc was able to post a 5.1 per cent revenue growth in the December quarter on commodity price recovery and a low-base effect, a report said on Wednesday.

"Indian corporate sector posted healthy revenue growth of 5.1 per cent in Q3FY2017...revenue growth was supported by recovery in commodity prices and low-base effect," domestic rating agency Icra said in a note.

In the analysis of 497 companies, the agency said the 5.1 per cent revenue growth, which is significantly higher than the preceding quarters of the fiscal, was supported by commodity prices which is reflected in performance of sectors such as metals, oil and gas and capital goods.

On demonetisation, it said consumption-driver sectors like auto, cement and fast moving consumer goods suffered a contraction of revenues during the quarter. Companies had to adopt strategies like offering credit to its channel partners, higher incentives and supply chain efficiencies to reduce the impact of demonetisation, it said.

For the consumer durable segment, which witnessed a contraction in sales during November and December, the impact was limited as most companies were entering new product segments during the time. Cement volumes contracted by 0.8 per cent during the October-December period, with the north and west regions impacted the most, it said.

"Demonetisation impact was felt across many domestic economy-oriented sectors," it said.