India Inc is likely to post double-digit growth in the coming financial year despite a global economic slowdown and rate hikes, according to a report by rating agency CRISIL. The agency has estimated that India’s corporate sector will grow by 11.5% in 2019-20, up from an estimated 9.5% in 2018-19.
According to the report, the growth in corporate profits will be driven by a pick-up in demand, the stabilisation of input costs, an improved liquidity position, and a focus on cost efficiencies. CRISIL also expects the corporate sector to benefit from the government’s continued focus on infrastructure investment and rural development, and from reforms such as the Goods and Services Tax (GST).
The agency believes that the rate hikes by the Reserve Bank of India (RBI) will have a limited impact on corporate profitability as the rate hikes will be largely offset by falling input costs. Overall, the report concludes that the corporate sector is likely to remain on a path of healthy growth in the coming financial year.