Corporate revenue growth is expected to be slower in the third quarter of this financial year at 12-13%, down from an average of 17% growth seen in the first two quarters, a Crisil report said.

“Commodity and infrastructure-linked sectors are expected to support revenues for the quarter ended December,” Prasad Koparkar, senior director, Crisil Research, wrote in the report. Steel, cement, natural gas and petrochemicals are expected to be driven by volume and/or realisation growth, while sectors such as construction are expected to grow on a pick-up in execution of key infrastructure-led government schemes.

Consumption spending-led sectors such as airline and retail will see revenues boosted by positive demand sentiments. In export-oriented segments such as IT, the boost would come from a weak rupee on a year-on-year basis, he added.

“However, overall revenue growth will be constrained by a demand slowdown in automobiles, sugar, aluminium and telecom services,” the report added. “Automobiles revenue is expected to have been impacted by a rise in ownership costs, while the other sectors would bear the impact of lower realisations and competitive pressures.”

The report went on to say that India Inc. is expected to face dampened profitability at the operating level with rising input prices building pressure on the cost structure.

“Despite softening of commodity prices and a weakening of the rupee towards the end of Q3 FY19, the prices of most common commodities remain high on-year,” the report said. “Having said that, full impact of the softening may be visible in the fourth quarter of this fiscal.”