Corporate India is in for a more painful period, as profitability will take a hit over the next six months, ICICI Bank CEO K V Kamath today warned and asked the industry to be patient for opportunities as the economy will start recovering in the second half of 2009.
"There is pain for another two quarters but I see an environment full of opportunity thereafter," Kamath, who is all President of Confederation of Indian Industry, told PTI in a telephonic interview.
"The most painful things for corporate India in the next few months would be to take profit impact due to loss of inventory valuation," he said and explained that this was a fallout of the commodities, steel, and oil prices more than halving in a matter of weeks when economic meltdown set in.
The warning coincides with a 22 per cent dip in advance tax in December and announcement of October-December quarter financial results this month.
The second major issue for the corporate world would be management of long term finance in the face of a sliding interest rate regime that has started now, with inflation dropping sharply in the last few weeks, he said.
In this context, Kamath offered a word caution to the industry on the global acquisition front.
Asked if India Inc should forget global takeovers, particularly in the backdrop of reported funding problems faced by corporate giant like Tata on Corus and Jaguar and Land Rover, Kamath said: "I think India Inc should use the time to basically to do detailing and other work on project they are looking at."