Ahead of the release of the second quarter GDP growth numbers, experts and analysts seem to differ on the likely growth rate by a fair margin. Analysts have given a range of estimates veering from 5.8% to 6.5%.
The second quarter growth numbers will be released later in the evening.
Economists and analysts at the State Bank of India have predicted GDP growth for the second quarter of FY23 at 5.8%.
The SBI research team believes that manufacturing sector growth in the second quarter is likely to be weak on the back of margin compression. It cites the example of corporate results (ex-BFSI), which shows EBIDTA degrowth in the second quarter of FY23 by 14% y-o-y as against 35% EBIDTA growth in Q2 FY22, though the top line continued to grow at a healthier pace.
"Net sales grew by 28% in Q2FY23 while bottom line was down by around 23%. Further, corporate margin seems to be under pressure, as reflected in results of around 3000 listed entities ex BFSI, on account of higher input costs with declining EBIDTA margin, on an aggregate basis, from 17.7% in Q1FY22 to 10.9% in Q2FY23," argues SBI in favour of its sub-6% growth prediction.
It adds that if a sub-6% growth materialises in Q2, it could imply that India is likely to have expanded at lower than the 7% benchmark.
Suvodeep Rakshit, Senior Economist, Kotak Institutional Equities feels the 2Q FY23 GDP growth will be at 6.2%.
"While this is much lower than 1QFY23 growth of 13.5%, much of it is due to differences in base effects. Contact-based services had continued to improve in 2QFY23 and festive season demand would have had a positive impact. Corporate earnings growth has been broadly in line with expectations which should support the GDP growth at around 6% level in 2QFY23," says Suvodeep Rakshit.
Icra has estimated the FY23 second-quarter growth at 6.5%.
According to Aditi Nayar, chief economist with ICRA, the Q2FY23 economic growth will slow down on account of mixed crop output and the ripple effect of the global slowdown.
RBI has also estimated a 6.2% growth in the second quarter of the current financial year.