43% MSMEs expect to end this fiscal year with pre-pandemic margins, says report

17 Nov 2022 , 09:19 AM

According to a report, despite virtually all of them being able to equal fiscal 2020 revenue levels this fiscal, over half of the small firms won’t be able to restore their margins to the pre-pandemic levels since they won’t be able to fully pass on high commodity costs and the rupee’s decline. The research is based on 69 industries and 147 clusters, or two-thirds of the MSME sector, which reported total revenues of Rs 56 lakh crore, or 20—25 % of the GDP.

Due to the high cost of commodities like crude oil and milk, about 30% of this 43%, which comes from industries like chemicals, milk & dairy, and packaged goods, will not reach the pre-pandemic margin level. Due to the weakening of the rupee, the remaining 13% from industries like pharma (bulk pharmaceuticals) and gems & jewelry may fall short of expectations.

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