Crisil sees strong corporate performance in Q3 FY11

MUMBAI: Crisil Research today said it expects a strong corporate performance in the third quarter (Q3) of FY 11, with revenues poised to accelerate to 23-24 per cent as against 21.7 per cent growth in Q2 of the fiscal.

"Demand volumes grew robustly in the second quarter of this fiscal. Since growth in consumer spending and infrastructure investments is likely to be sustained, the demand growth momentum in Q3 will continue in most industries," Crisil Research Head, Sridhar C, said in a statement here.

Revenues, which grew by 21.7 per cent in the July- September 2010 (Q2 FY 11), are likely to accelerate to 23-24 per cent in Q3 FY 11, he said.

The expected growth in revenues would be significantly higher than the 8.6 per cent growth witnessed in Q3 FY 10, "due to sustained growth in demand volumes and improving realisations", Sridhar said.

The demand volumes in Q2 of FY 11 grew since revival in discretionary corporate spending spurred growth in IT services and hotels, he said.

"A recovery in consumer spending fuelled demand growth in automobiles, retailing and consumer durables. Similarly, rising infrastructure investments pushed up demand in cement, steel and construction. These factors led to a rise in demand volumes."

Based on an analysis of the aggregate financial performance of 156 companies across 23 industries, Crisil Research expects revenues and operating profits to grow strongly at 23-24 per cent and 21-22 per cent, respectively.