The survey done in the last week of March, seeking views of India Inc about the outlook in the next quarter and the six months, found that according to 60.9 per cent of the respondents industry's performance in the coming six months would improve. Thus there is that sense of hope and optimism that seems to be growing within the industry.
The latest round of ASSOCHAM Bizcon Survey shows improvement in terms of outlook than in 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 possibility 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 bottomline 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. Thus, it is clear that the industry needs to be a little more patient when it comes to solid results on the ground. The policies have a lag. Besides, the global economic situation makes a difference, while the recovery seems to be coming from the domestic demand pick up, ASSOCHAM President Mr Rana Kapoor said.
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.
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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.
However, the fresh investment commitments remain some distance away. As many 39.1 percent respondents believe that April to June 2015 quarter won't see any change in their domestic investment plans, said Mr. Kapoor.
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.
For now, the focus seems to be on better utilization of the existing capacity, as indicated by the ASSOCHAM Bizcon Survey, chamber Chief said.
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 majority (60.9 percent) of the firms seem to be optimist 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.
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