IGI Logo

State Bank of India (SBI) in its latest report has projected India's Gross domestic product (GDP) growth of 4.6 per cent for the December quarter, citing that as many as 30 high frequency indicators are not as robust as they were in the previous quarters. However, the projection is higher than the Reserve Bank of India's forecast of 4.4 per cent for the third quarter of this fiscal.

It mentioned the lower forecast also stems from poor corporate results, ex-BFSI, which have shown that operating profits grew at a much slower 9 per cent in the third quarter, which is just half of 18 per cent recorded in the year-ago period. Also, despite a 15 per cent in net sales, the bottom line was down by around 16 per cent.

It expects an upward revision in growth to 7 per cent for the full fiscal, up from 6.8 per cent projected earlier. This is because the government is anticipated to revise the GDP numbers for FY20, FY21 and FY22 on February 28. Additionally, there will be revisions in quarterly numbers of FY20, FY21, FY22 and even for the Q1 and Q2 of FY23.

As per the report, corporate margin seems to be under pressure as reflected in results of around 3,000 listed companies, excluding financial services companies, due to higher input costs with decreasing margins. Margins declined from 15.3 per cent in Q3FY22 to 11.9 per cent in Q3FY23, and this could pull down manufacturing growth in Q3.