India Inc pessimistic on sales for next 6 months

However, “even while business sentiments showed considerable improvement, the firms’ sales growth projection for the next six months appears ‘somewhat subdued’, especially for the consumer non-durable segment, NCAER said.

The proportion of consumer non-durable firms expecting their sales to grow, had decreased from 73.7 per cent in the previous round to 68.9 per cent in current round, it observed. Both services and consumer durable sectors expect a fall in production during the next six months, it said.

While the proportion of firms belonging to the consumer durable and non-durable sectors expecting their pre-tax profit to go up has increased, ‘no such tendency is visible for firms belonging to other sectors like intermediate, capital and services.’

‘In fact, the proportion of firms reporting their pre-tax profit to remain unchanged during the next six months has increased,’ NCEAR said.

According to the think tank, ‘it appears a bit surprising that when on fronts such as sales, production and exports the firms are reporting an increase, the same in not true for the pre-tax profits.’ This result also do not go well with financial results of corporate sector, which had been reporting handsome profits this fiscal, NCEAR survey said.

The survey said the wages of both skilled and un-skilled labour were expected to rise during the next six months, even as they said the trend in hiring was on the rise. It said rising cost of labour was in tune with expected increase in the wages of workforce. NCEAR said the cost of raw materials in this round showed rising tendency.

The proportion of firms expecting raw material costs to go up in the next six months has increased by 19.4 per cent in this round as compared to the previous one, it added.