CRISIL – Research Pulse, Nov 2023

According to CRISIL's Research Pulse report for November 2023, overall revenue in fiscal 2023 is expected to have grown moderately, driven by increases in volumes and realizations. The consumer discretionary segments, specifically airline services and hotels, are anticipated to have a strong performance due to a robust demand recovery. Looking ahead to fiscal 2024, overall revenue is projected to grow by 9-11% on-year in double digits, primarily driven by volumes as price growth moderates. Growth is expected to be driven by consumer discretionary services and commercial-linked segments, while exports and commodities are expected to lag behind. The report also highlights that the EBITDA margin for fiscal 2023 is estimated to be between 17-20%, a decrease of nearly 200 basis points compared to the previous year due to high energy and metal prices. However, for fiscal 2024, margins are expected to increase by 150-200 basis points on-year due to lower input prices. In the commercial vehicle sales sector, fiscal year 2024 is anticipated to surpass pre-pandemic levels recorded in fiscal year 2019, with sales ranging between 4-6%. This growth is supported by increased government spending and robust replacement demand from key end-user sectors like construction and mining. For the passenger vehicle industry, fiscal 2024 is expected to see a growth rate of 6-8% over the high base of fiscal 2023, which experienced a sales growth of 27%. This growth is attributed to strong demand for existing UV models and the successful performance of newly launched UV models by market leaders with well-developed dealer networks. Additionally, the easing semiconductor shortage and improved product mix are expected to aid margin expansion in fiscal 2024.