New Delhi: India Inc expects better days in next six months in terms of growth in sales and profitability in sync with an uptick in the big macro picture, though fresh investment by the private sector is still far off thanks to continuous under-utilisation of capacities, according to Assocham Bizcon survey.
As many as 65 per cent of the companies covered under the June series of Assocham Bizcon said they expect the macroeconomic parameters to look up by December 2016, said the chamber. “Along with it, an equal percentage of the firms across different sectors said the performance at the industry level would also pick up with a consequence that there would be better sales realisation and improvement in the profitability,” said Assocham.
“Net-net, the latest Bizcon Survey tells us how things would look up in the next six months, mainly on the back of uptick in consumer demand helped by good monsoon. If consumer prices ease after the monsoon play out, we can even hope for the interest rates to moderate. Fortunately, crude oil prices continue to remain muted despite threats of a rebound earlier,” said Assocham secretary general D.S. Rawat.
Assocham said that, there was a shared optimism by 69 per cent of the respondents about better prospects even at the individual firms’ level, translating into the overall corporate earnings in the coming two quarters.
Though fresh employment generation has so far remained a challenge, about 41 per cent of the corporate respondents expect pick up in the job creation, it said.
“In terms of the wage costs scenario majority of the industry respondents (65.5 per cent) feel that the wage costs will increase in future also,” said Assocham.
The chamber said that the survey seems to reflect that in terms of the domestic investments there has been no change in the firm investment plans in the April to June 2016 quarter. The survey indicates that industry is not confident about own investment plan as 37.9 per cent of respondents believe that domestic investment may increase or there will be no change in the shorter horizon. “Thus there seems to be a continuing lack of appetite for new investment in the private sector,” it said. The problem of high debt in infrastructure and commodity sectors continues to stay there.
