GDP to shrink 16.5% in 1st quarter: SBI report

Mumbai, August 17

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State Bank of India’s research report Ecowrap expects the country’s GDP to contract by 16.5 per cent during the first quarter of the current fiscal.

Rs 27,000 loss

• Top 10 states accounted for 73.8% of the total loss
• Maharashtra contributed 14.2%, TN 9.2% and UP 8.2%
• All-India per capita loss around Rs27,000, SBI report said

In principle, revenue decline of listed companies has been far outstripped by cost rationalisation. SBI report

In May, Ecowrap had estimated Q1 FY21 GDP contraction at over 20 per cent and now pegs it at much lower contraction of 16.5 per cent for the quarter, “though with the relevant caveats in the current uncertain scenario”, the research report released on Monday stated.

It said degrowth in corporate GVA (better than expected results of some financial and non-financial companies) has been significantly better than revenue degrowth in Q1 FY21 as far as the results of the listed companies are concerned.

So far, around 1,000 listed entities have announced their results for the first quarter. The results indicate more than 25 per cent decline in topline and more than 55 per cent decline in bottomline.

However, it is interesting to mention that the decline in corporate GVA (gross value added) is only 14.1 per cent, it said. “In principle, revenue decline of listed companies has been far outstripped by cost rationalisation, thereby not impacting margins,” the report said.

It said in July and August, coronavirus significantly penetrated the rural areas. The percentage of cases in rural districts to total new cases has risen to 54 per cent in August. Also, the number of rural districts with less than 10 cases has reduced significantly. Andhra Pradesh and Maharashtra have been impacted more severely with increasing coronavirus penetration in rural areas. — PTI