Ahead of the start of earnings season, domestic rating agency Crisil today said it expects India Inc's revenue growth to hit a five-year high of 9 per cent for the October-December 2017 period.

However, profits will continue to contract, primarily due to the rising commodity prices, the note by its research wing said.

The aggregate topline of companies in key sectors will grow 9 per cent over same period last year on higher realisations in steel, aluminium, cement and crude oil-linked sectors, and a pick-up in consumption-driven sectors such as auto and aviation, its research wing said.

The revenue growth, which comes after a broadbased improvement in the preceding second quarter that was taken as a prelude to a cyclical upturn, is ahead of inflation by a meaningful margin now, Crisil Ratings' senior director Prasad Koparkar said.

He added for FY18, it expects a revenue increase of 8-9 per cent for the listed companies.

The research wing disclosed that its estimate is for companies across key sectors, representing 70 per cent of the market capitalisation of NSE-listed companies.

Export linked sectors such as information technology and pharmaceuticals will disappoint, along with telecom where the incumbents are forced to slash tarriffs due to aggressive play by the newcomer Reliance Jio.

With the GST-related worries abating and trade channels reverting to normalcy, the consumption linked sectors are expected to be the primary drivers of revenue growth for the second half of the fiscal. The consumption-linked sectors excluding telecom had reported a 15 per cent revenue growth in the second quarter.

For the first two quarters, companies have reported a revenue growth of 6 per cent despite the impact of the Goods and Services Tax (GST) implementation, it said, adding that if not for the reverses in telecom, the revenue growth would have come at 10 per cent.

From a profitability perspective, there can be a contraction of up to 1.30 per cent in the pre-tax profits.

"EBIDTA margin fell for 8 of 21 sectors in the second quarter of this fiscal, and we expect this trend to continue. A contraction of 1-1.30 per cent in aggregate EBIDTA margin in the third quarter would intensify pressures because there’s little latitude to control cost amid rising commodity prices," its director Hetal Gandhi said.

Telecom services, pharma, sugar and housing will see the sharpest fall in margins, it said, adding that had it not been for these, the overall pre-tax margins for key sectors would have declined by only 0.40 per cent in the third quarter of the fiscal.