Even though the overall outlook for corporates have improved on the back of faster than expected recovery, and the same is likely to gain further traction in H2 but the rising commodity prices and logistics cost pose headwinds to their profitability, a report said without quantifying it.
The economy has made a faster turnaround with the impact of the pandemic fading and favourable financing and external demand conditions. This has many analysts revising up their real GDP growth forecast for the year.
Earlier in the day, Swiss brokerage UBS Securities revised upwards their growth projection for FY22 to 9.5 per cent growth, from the 8.9 per cent they projected in September. Meanwhile, PMEAC chairman Bibek Debroy sees the economy clipping at 10 per cent.
In a report on Wednesday, rating agency India Ratings said entities with a strong market share and healthy balance sheet will continue to show strong earnings in H2, although margin may moderate, commodities dependent sectors will face challenges in the complete pass-through of input prices.