Is India Inc poised for double-digit growth in 2024 despite global slowdown, rate hikes?

Amid the global slowdown and interest rate hikes, India Inc is anticipated to generate double-digit growth in the upcoming fiscal year, according to the rating agency CRISIL's report. 

In its 'India Outlook Report 2023', released on Thursday, the rating agency stated that the revenue growth for India Inc will touch double digits in fiscal 2024 despite a global slowdown and interest rate hikes. The said projections in the CRISIL report were based on an analysis of 748 listed companies from fiscal 2011 onwards (excluding those from the oil and gas, banking, financial services and insurance sectors).

India Inc to grow in double-digit in 2024: CRISIL

CRISIL, in its report, stated that the double-digit growth in India Inc will be driven by a "10-12% growth in revenue for the non-commodity sectors, even as commodity prices remain benign". The report said that the strong performance will come after a 16–18% on-year gain in fiscal 2023, which was also driven by the non-commodity sector, and a huge 25% surge in the previous fiscal year, riding a super cycle in commodities.

According to the report, India Inc's operating margin would increase by 120-170 basis points in the next fiscal year. Three things will support it: volume growth; stable commodity prices; and the full impact of pricing increases implemented in fiscal 2023.

The report also lauded Government policies saying, "While government policies will continue to push industrial capex and new-age opportunities, infrastructure spending will drive 12-16% growth in overall capex next fiscal. This is to achieve nearly 75% of the initial targets set under the National Infrastructure Pipeline by fiscal 2025."

On the one hand, the rating agency estimates double-digit growth in corporate revenue, on the other hand, it also states that it expects India's GDP growth to touch 6% in fiscal 2024 as compared to National Statistics Office (NSO) estimate of 7% growth in GDP in fiscal 2023.

"Consumer inflation is expected to moderate to 5% on average in fiscal 2024 from 6.8% in fiscal 2023, owing to high-base effect and some softening of crude and commodity prices. A good rabi harvest would help cool food inflation, while the slowing economy should moderate core inflation," the agency said.