A spurt in volumes on a low base, coupled with improvement in realisations riding on higher commodity prices, are expected to lift corporate revenue by 15-17 per cent year-on-year to Rs 6.9 lakh crore in the fourth quarter of fiscal 2021, a Crisil Research report said.

As per the estimates, the double-digit growth comes after eight quarters of either decline or single digit growth.

The estimates are based on an analysis of 300 companies, which account for 55-60 per cent of the market capitalisation excluding financial services and oil companies of the National Stock Exchange.

Crisil Research Director Hetal Gandhi said: “The robust revenue growth rides on a low base of the corresponding year-ago quarter, besides higher government capital expenditure, and higher realisations amid a commodity upcycle, among others.”

“A closer look at the revenue breakup indicates 50 per cent of the recovery is contributed by three key verticals – automobiles, IT services and construction.”

The report cited that construction-linked sectors such as steel and cement are estimated to have seen revenue rise 45-50 per cent and 17- 18 per cent on-year, respectively, buoyed by higher realisations and volumes.

However, the report said that a cloud of uncertainty continues to loom over consumer discretionary services.

“Revenue for players in sectors such as airline services is estimated to drop 30 per cent on-year amid social distancing and cut in discretionary expenses, especially travel budgets.

“Similarly, revenue for players in media and entertainment is also expected to drop 10 per cent on-year due to lower advertisement spends and subscriptions. That said, a lower share of such sectors in the top 300 sectoral mix has muted the impact.”

Besides, an increase in commodity prices should result in contraction of margins across key sectors, it warned.

“Margins in steel, cement and pharmaceuticals sectors, which together account for 30 per cent of aggregate Ebitda profits, are expected to contract by 380 bps, 230 bps and 160 bps, respectively, on a sequential basis.”

“Despite this, fiscal 2021 would see Ebitda profiles rise 12-13 per cent on-year over flat revenues. Ebitda margins would reach a decade high of 22.2 per cent led by low commodity prices in the first half and fixed cost-reduction initiatives across companies for the year.”

In addition, the report said that due to the second wave, states are likely to mount partial lockdowns, keeping demand recovery uncertain in the near term.

“Newer strains of the virus, scale of vaccinations and subsequent revival in demand would be among the key monitorables for fiscal 2022.”