Industry confident of a demand revival in six months: Survey

Majority of respondents believe that profit margin has remained same during January to March 2015. But, going forward, survey results indicate that 43.5 percent of the respondents feel that their profits will increase in the short term.

The Dollar Business Bureau Economy-Demand-The-Dollar-Business More than 60% of the industry feel that the economy will improve in the coming six months. An Assocham-Bizcon Survey conducted in the last week of March seeking views from India Inc said that the general perception among the Indian industry is that things will improve in the next six months in terms of better sales realization and improved order books, reflecting a sense of hope and optimism. The survey also shows improvement in terms of outlook as compared to the previous survey. With regards to the expected order book position in the April to June 2015, quarter majority (60.9 percent) of the firms seem to be optimist and expect an increase in the orders. Thus, there are some indications of a revival being seen in the demand within the economy. As many as 65.2 per cent of the respondents expect that during April to June 2015 their sales volume will further increase. However, when it comes to profits, lesser percentage of respondents (43.5 per cent) feel that their bottom line will further increase in the short term i.e. April to June 2015. Majority of respondents believe that profit margin has remained same during January to March 2015. But, Going forward, survey results indicate that 43.5 percent of the respondents feel that their profits will increase in the short term. On the other hand, respondents who expect the profit margin will remain same have declined from 39.1 percent during January to March 2015 to 21.7 percent during April to June 2015. Thus the March 2015 round survey indicates that firms are optimistic about their future profitability. Sizeable number of industry leaders felt raw material prices in the April to June 2015 quarter won’t increase further. But the wage costs might rise. About 39 per cent of the respondents feel that in the April to June 2015 quarter no change is expected in the costing of electricity. Similar feeling is reflected in the international investment perspective for the April to June 2015 quarter as majority respondents (43.5 percent) indicate that no change will be there in the investment plans. March 2015 survey results indicate that majority of the industry (56.5 percent) is of the opinion that it will again be engaged at higher levels of capacity utilization in the April to June 2015 quarter. For the April to June 2015 quarter, a majority (60.9 percent) of the firms seem to be optimistic and expect an increase in the order book position. In terms of policy parameters, investment on infrastructure comes on top of the priority list of the industry leaders, followed by effective policy reforms, clearance of pending projects and stable foreign exchange rates. Inflation does not seem to be a big concern at this point of time.