High commodity prices will stop Chemical MSMEs reach pre-pandemic margin in FY23: CRISIL

New Delhi, Nov 17 (KNN) MSMEs from sectors such as chemicals, milk & dairy, and packaged foods will not reach the pre-pandemic margin level because of the high prices of commodities such as crude oil and milk, said a report by CRISIL.

This is about 30 per cent of the 43 per cent MSMEs which are expected to see their FY23 earnings before interest, tax, depreciation and amortisation (EBITDA) margin remain below the pre-Covid or FY20 levels.

Due to rupee depreciation, the remaining 13 per cent from sectors like pharma (bulk drugs) and gems & jewellery will fall short of the mark.

According to the Crisil report almost all small businesses are likely to close this fiscal at the FY20 top-line levels.

According to Pushan Sharma, a director at the agency, the overall MSME sector is expected to bounce back to 1.27 times the pre-pandemic level in terms of revenue this fiscal.

“While their operating margin is expected to touch the pre-pandemic level this fiscal for 43 per cent of MSMEs by value will buck the trend,” said Sharma.

The report is based on 69 sectors and 147 clusters or two-thirds of the MSME universe, which logged an aggregate revenue of Rs 56 lakh crore, representing 20-25 per cent of the GDP.  (KNN Bureau)