SME Digital World

Tag: CRISIL

  • Bright Outlook for MSMEs in ITeS Sector, Reports CRISIL SME Tracker

    Bright Outlook for MSMEs in ITeS Sector, Reports CRISIL SME Tracker

    semi conductor

    Bright Outlook for MSMEs in ITeS Sector, Reports CRISIL SME Tracker

    The micro, small, and medium enterprises (MSMEs) in the information technology-enabled services (ITeS) sector are projected to grow by 7-9% in rupee terms to reach Rs 4.2 trillion this fiscal year. This growth is driven by a strong order pipeline and minimal impact from the global economic slowdown that affected the sector last year.

    Key drivers of this growth include the revival of deferred projects and new orders from crucial sectors such as banking, financial services, insurance, and manufacturing. MSMEs, which make up 30-40% of the industry and primarily focus on customer relationship management (CRM) services—accounting for 75% of revenue—are set to benefit from the shift toward non-voice revenue streams.

    In other ITeS areas, transaction services are expected to grow due to the rise in digital payments, while knowledge services are evolving with a greater emphasis on analytics-based offerings.

    Employee growth in the sector is forecasted to remain modest at 0-1% this fiscal year, as companies adopt a cautious stance, delaying discretionary projects and prioritizing cost efficiency and skill development over large-scale hiring.

    Looking ahead, the sector is expected to grow by 8-10% next year, driven by increased global outsourcing and offshoring for cost savings. The healthcare and travel sectors are also anticipated to experience double-digit revenue growth, further boosting the industry.




  • CRISIL SME Tracker: Higher demand, PLI to propel electronics MSMEs in FY25

    CRISIL SME Tracker: Higher demand, PLI to propel electronics MSMEs in FY25

    CRISIL SME Tracker

    CRISIL SME Tracker: Higher demand, PLI to propel electronics MSMEs in FY25

    Various factors contributed to the growth, such as increasing penetration of internet and 5G services, rising consumer income, shorter replacement cycles, easier payment terms

    Domestic consumption of electronics items is estimated to have grown 13-15 per cent to Rs 14-15 trillion in the financial year ended March 31, 2024 (FY24), with mobile phones and consumer and industrial electronics accounting for 50-55 per cent of the pie.
    Various factors contributed to the growth, such as increasing penetration of internet and 5G services, rising consumer income, shorter replacement cycles, easier payment terms, and developments in the auto, electric vehicle, and power segments.

    In FY25, overall electronics consumption growth is expected to moderate to 10-12 per cent as inflation marginally affects sales of mobile phones and consumer durables, which account for 40 per cent of electronics consumption in the country.

    Electronics production, however, is expected to grow 15-20 per cent, largely owing to the production-linked incentive scheme (PLI) that is encouraging manufactu­ring of mobile phones, white goods, informa­tion technology hardware, and solar photovoltaic cells and modules.
    That augurs well for the micro, small and medium enterprises (MSMEs) that produce electronics components and assemble consumer and industrial electronics products.
    The MSME units account for 25-35 per cent of the industry’s consum­ption of components. These units are expected to log a revenue growth of 11-13 per cent year-on-year (Y-o-Y) in FY25, driven by mobile phones, consumer and industrial electronics, computer hardware, and strategic electronics.
    As for margins, following a range-bound performance in FY24, the MSMEs are expected to experience a slight contr­a­ction of up to 30 basis points in FY25, primarily because of commodity prices.

  • CRISIL SME Tracker: Positive Shifts for Chemicals MSMEs

    CRISIL SME Tracker: Positive Shifts for Chemicals MSMEs

    Chemical MSME

    CRISIL SME Tracker: Positive Shifts for Chemicals MSMEs

    The outlook for the domestic chemicals industry is improving as demand rebounds and inventories stabilize.

    In the previous fiscal year, factors such as oversupply from China, weak demand in developed markets, and inventory adjustments led to subdued revenue growth.For the current fiscal year, Crisil Research expects the industry to rebound by 7-9% from a lower base.

    While certain segments like dyes and pigments, discretionary industries, and agrochemicals continue to face challenges, these are seen as temporary obstacles, and the medium- to long-term outlook remains optimistic.

    This positive outlook is particularly beneficial for the 292,856 micro, small, and medium enterprises (MSMEs) that constitute 30% of the domestic chemical industry (according to Ministry of Chemicals & Petrochemicals data), with significant clusters in Thane, Mumbai, and Ahmedabad. Nearly half of these enterprises are engaged in organic manufacturing, while others focus on dyes and pigments, soaps and detergents, with agrochemicals making up 8%.

    Among industry segments, specialty chemicals, representing 19-21% of the domestic industry, are expected to see margins rebound by 200-300 basis points this fiscal year after facing erosion last year due to high-priced inventories and lower product realizations.

    Within specialty chemicals, agrochemicals are projected to achieve 10-12% revenue growth this fiscal year after experiencing degrowth last year due to low prices and weak demand caused by El Niño and subsequent deficient rainfall. Agrochemicals margins are expected to normalize from the second quarter due to destocking of high-cost inventories.

    Colourants, another significant segment of specialty chemicals, are forecasted to achieve 4-6% revenue growth this fiscal year, driven by expectations of interest rate cuts in Europe and the US boosting discretionary spending. This follows a decline of 1-3% last year due to recessionary pressures and inflation affecting market sentiment.

    Overall, domestic producers may still face margin pressures as prices of key bulk materials could remain depressed due to ample supplies and the commissioning of newer capacities.

Login