India’s Q4 FY23 growth pegged at 5.5%, FY23 growth at 7.1%: SBI Ecowrap

State Bank of India’s (SBI) latest research report, Ecowrap, mentioned on Friday that India’s growth in the fourth quarter of FY23 is likely to be 5.5 per cent, leading to the country’s growth for FY23 at 7.1 per cent. This is in line with the advance estimates released by the National Statistical Office (NSO) in January that pegged the growth for the year ended March 31, 2023, at 7 per cent. 

The report said that amid economic uncertainty in the global landscape, India is expected to pursue a “different pathway of zeroing in on drivers of growth, looking for a renewed surge in resilient manufacturing while supporting the services sector to embrace enhanced efficiency”. 

It said that the Union Budget 2023-24’s emphasis on capital expenditure is expected to crowd-in private investment, strengthen job creation and demand and raise the growth potential. 

“RBI has estimated Q4FY23 Real GDP growth to be 5.1 per cent and full year FY23 estimates by NSO is 7.0 per cent. For 2023-24, RBI is projecting GDP growth at 6.5 per cent with Q1 pegged at 7.6 per cent. SBI’s ANN (Artificial Neural Network) model, based on 30 high frequency indicators from key sectors, and tuned/trained to project the GDP numbers forecasts the quarterly GDP growth for the Q4FY23 at 5.5 per cent. At this rate, India’s GDP growth for FY23 is likely at 7.1 per cent,” it said. 

The SBI Ecowrap stated India Inc continues to “front lead the economic turnaround while embracing better operational and financial efficiency”. “In Q4FY23, around 1,700 listed entities reported top line growth of 12 per cent, while PAT grew by around 19 per cent as compared to the same period previous year. Same set of companies reported EBIDTA growth of around 23 per cent in Q4FY23,” it said. 

It said that corporate results for Q4FY23 showed both top-line and bottom-line growth of around 10 per cent, while EBIDTA grew by 7 per cent. “Further, it is pertinent to mention that corporate margin, which was continuously under pressure for the last few quarters, showed signs of improvement in Q4FY23. 

Foreign capital inflows are also witnessing green shoots with YTD FIIs inflows in FY24 touching $6 billion, which is a reversal of the trend from 2022. 

However, start-up financing has been hit due to banking turmoil in the US, the Ecowrap stated, also referring to the failure of regional banks in the US but that it also offers a chance to domestic FIs to ensure the sweet spot enjoyed by India grows in a disruptive and disproportionate manner. 

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