Note ban fails to affect infrastructure business

Mumbai: Industries based on consumer spending were hit by demonetisation which resulted in a cash crunch whilst those in infrastructure sector have performed better.

Size-wise the larger companies with sales above Rs 1,000 crore fared better with a growth of 8.5 per cent in net sales than the ones at the lower end of the scale.
In the case of the latter, companies in the range Rs 500-1,000 crore and Rs 100-250 crore, registered only marginal growth in sales of 0.3 per cent  and 1.1 per cent  respectively, however, growth in net profit was impressive as it increased from Rs 661 crore to Rs 2,240 crore, according to Care chief economist Madan Sabnavis.  

The size range with maximum number of companies i.e. less than Rs 100 cr, registered the lowest growth in net sales as well as net profit for Q3 2017.

Services like retailing were affected most by demonetisation with consumers having less cash in hand, while hospitality and telecom were also on the downslide.

Everything related to real estate – construction, cement, engineering construction was also affected as consumers deferred purchases. The industries that did well were in the areas of infrastructure where government spending compensated for low private demand. These included capital goods and metals. The finance companies also did well – both housing finance and NBFCs.

Maximum decline was witnessed in industry group of consumer foods, textiles, auto trucks/LCVs, tyres & allied services, aluminum, retailing, hotels, resorts and restaurants, telecom service providers, mining & minerals, rubber & plastic products etc.