A fourth of Indian micro, small and medium enterprises have misplaced 3 per cent or extra of their respective market share to large companies in the course of the Covid pandemic, a report mentioned on Monday.
Rating company Crisil’s analysis wing analysed MSMEs from 69 sectors and 147 clusters having a income of Rs 47 lakh crore or a fourth of India’s GDP to reach on the particulars on how the small companies fared in the course of the pandemic.
“More than a quarter of India’s Micro, Small and Medium Enterprises (MSMEs) lost market share of over 3 per cent due to the Covid-19 pandemic,” the report mentioned.
It mentioned that half of those corporations which witnessed a lack of market share additionally noticed a contraction of their working revenue.
It might be famous that the impression of the pandemic on the smaller companies has been a topic of curiosity due to their vulnerabilities on account of measurement.
“…large ones leveraged their global presence to procure raw materials, so could eat up a huge chunk of the SME pie,” its director Pushan Sharma mentioned.
Sharma mentioned provide chain disruptions impacted small pesticides producers extra, whereas edible oil SMEs (Small and Medium Enterprises) misplaced market share on account of a rise in hygiene quotient because the pandemic meant much less consumers for oil offered in free.
Pesticides and edible oil SMEs suffered margin contraction of 1 per cent and a couple of per cent, respectively, on account of partial pass-through of the rise in uncooked materials prices, which jumped by 60 per cent, Sharma added.
MSMEs in ‘essential’ segments like pharmaceutical/agricultural millers hardly misplaced any market share, it mentioned.
On the opposite aspect, corporations in sectors similar to metal pig iron gained share the place solely SMEs might capitalise on revival in infrastructure demand, as massive crops captively consumed their output, it mentioned, including that tobacco models additionally gained market share.
Sectors similar to transport operators, edible oil, gems and jewelry are probably the most susceptible to working revenue losses owing to wafer skinny margin of lower than 3 per cent and restricted enter value pass-through of below 60 per cent, the report mentioned.
“Amid the pandemic and ongoing geopolitical crisis, sectors such as textiles and pharmaceuticals have offered a ray of hope for exports. Cotton yarn exports have benefited from the US ban on Xinjiang, China-made items, apart from the China+1 policy,” its affiliate director Elizabeth Master mentioned.
While the business working revenue margins are anticipated to the touch the pre-pandemic degree this fiscal, MSMEs in additional than half of the sectors will buck the pattern. The efficiency can be underwhelming within the context of total company India, which is anticipated to log a 10-14 per cent enhance in income and working revenue margin of 19-20 per cent, the report mentioned.
Source: www.financialexpress.com”