India Inc’s profitability margin likely dropped during Q3FY22 on a year- on-year (YoY) and sequential basis.

As per Crisil Research’s analysis of 300 linked by companies, excluding 200-250 those in the financial sector. vices, and oil and gas sectors indicated a 100-120 basis points (bps) dip on year and 70-100 bps sequentially during the period under review.

The trend marked the first on-year decline in 12 quarters. The analysis showed that as many as 27 of 40 sectors tracked by Crisil Research are likely to see their Ebitda margins shrinking.

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In terms of sectors, marking gains in consumer discretionary sector likely fell 130-150 bpson-year, and in export 200-250 bps.

Besides, in- formation technology services likely saw margins contract 230-250 bps due to increased sub-contracting, while steel products and pharmaceuticals may log a contraction of 110-130 bps each due to rising input costs.

“Companies were unable to fully pass on soaring input costs, especially key metals and energy prices. Flat steel prices were 48 percent higher on-year in the third quarter, while aluminium was up 41 percent,” said Hetal Gandhi, Director, Crisil Research.

“The price of Brent crude surged nearly 79 percent while those of spot gas and coking coal rocketed almost 5.4x’ and 2.4x’, respectively, on-year.”

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