With the festival period failing to boost demand for Indian companies' goods and services, business sentiment in November fell to the lowest level since February 2014 and is unlikely to revive over the coming few months, says a survey.
The Deutsche Borse's MNI India Business Sentiment Indicator, a gauge of current sentiment among BSE listed companies, dropped 11.6 per cent in November as compared to October.
The fall in sentiment was observed across both manufacturing and construction companies.
However, the sentiment among service sector companies rose for the first time in five months.
"The busy festival season failed to bring cheer to India's largest companies in November, as business sentiment fell to the lowest level since February 2014, with companies also seeing little chance of a revival over the coming months," the survey said.
Noting that the festivals failed to boost demand for Indian companies' goods and services this year, the report said, "Companies across all sectors received fewer orders in the three months to November compared with the same period a year earlier".
New orders fell 11.1 per cent, while exports were down 9.4 per cent in November from the same period a year ago.
According to the report, the only real positive came from an improvement in companies' balance sheets, helped by the decline in commodity prices and interest rate cuts.
"Indian business confidence has been in trend decline for over a year and November survey shows few signs of end in sight," MNI Indicators Chief Economist Philip Uglow said.
"Weak demand means that companies are unable to capitalise on the positives of lower input costs and looser monetary policy," he noted.
MNI India Business Sentiment is a monthly poll of Indian business executives at companies listed on the BSE. More than 400 companies are surveyed each month and are a mix of manufacturing, service, construction and agricultural firms.
