MUMBAI: Citing a weak manufacturing sector as a major drag on margins, SBI Research has pegged the country’s GDP growth for the second quarter at 5.8 per cent, 30 basis points below the average estimate. The government will release the official numbers on November 30.
Corporate results, operating profit of companies, excluding banking and financial sector, declined by 14 per cent in Q2FY23 as against a growth of 35 per cent in Q2FY22, Soumya Kanti Ghosh-headed SBI Research said in a report on Monday, though the top line Grow at a continued healthy pace. Net sales jumped 28 percent, while the bottom line was down nearly 23 percent from the year-ago period.
Further, corporate margins appear to be under pressure, as reflected in the results of nearly 3,000 listed entities, excluding the banking and financial sector, with a decline in operating margins from 17.7 per cent in Q1FY22 to 10.9 per cent in Q2FY23 due to higher input costs. Percent.
Citing a gap of two months in the quarterly GDP data, Ghosh said that given this and the wide divergence in the market consensus (6.1 per cent) with respect to the second quarter GDP numbers, SBI would have printed the economy at 5.8 per cent. He sees what happened. This full-year growth rate of 6.8 per cent is 20 basis points lower than the RBI’s estimate.
SBI’s forecast, based on its Composite Leading Index, a basket of 41 key indicators based on monthly data, shows a decline in economic activity between June and September, but an increase in economic activity in October, That makes third quarter growth more optimistic.
However, Ghosh said, several indicators suggest that the economy is exerting its influence on world trade due to geopolitical developments since the second quarter, despite global spillovers, high inflation and some moderation in external demand.