Impact of Covid-19 pandemic to spill over in FY23: Ind-Ra

by Nidhi Bhati

With the second wave of the pandemic disrupting supply chains for most industries, India Ratings and Research (Ind-Ra) expects the overall recovery path to be pushed back for most of the service-oriented sectors beyond the current fiscal. However, fiscal 2021-22 is likely to be better than 2019-20 for most of the sectors due to an improvement in revenue benefitting largely from elevated prices and pent-up demand resulting in higher volume growth, volatile commodity prices along with interest rates reversal and the rupee fall, it added. The rating agency expects an overall median revenue growth of six per cent for corporates in 2021-22 over 2019-20 and 21.2 per cent over 2020-21. The forecast is more than its own earlier assumption of 4.4 per cent, though. Sectors linked to consumer discretionary expenditure and exports are likely to witness a lower-than-expected improvement,Ind-Ra noted. Within these sectors, airlines, real estate residential and hotels would be the most severely impacted and may not see recovery until second half of the current fiscal. Sectors like pharma, chemicals, cement and steel may witness some capex on account of higher liquidity cushion with them.