After the hit of the pandemic, India Inc is now worried about the adverse impact of inflation and higher commodity prices on their revenues and margins. The inflation scare is the strongest among manufacturers of consumer goods such as automobiles, consumer durables, and fast-moving capital goods (FMCG). Companies across sectors fear they will not be able to pass on the hike in input costs to their consumers due to weak demand, which, in turn, would lead to a hit on margins and profitability in the forthcoming quarters.
Outflows fell 16.4 per cent in April-Sept 2009 compared to the year-ago period.
Weighed down by a sharp rise in input costs and limited ability to pass on the burden to customers, India Inc's operating margins took a hard knock in the first quarter of 2008-09 even though demand was buoyant as reflected in zooming sales.
India Inc is likely to face power shortage this summer. The production has already falling down by about 25 per cent in February-March 2008, and will go down 35 per cent between April-July this year. Power shortage will affect Delhi, Uttar Pradesh, Haryana, Madhya Pradesh, Rajasthan, Maharasthra, Andhra Pradesh, Karnataka, Tamil Nadu and Gujarat. Lack of fresh investment and modernisation & huge transmission losses are responsible for the grave power situation in the country.
Falling sales since demonetisation has alarmed CEOs, who want to save cash till the economy recovers.
Rising crude oil prices along with hardening interest rates in the domestic market have taken a toll on India Inc's growth outlook in the first quarter of the current fiscal.
Bond issuances dipped 31.4% during January-June
The slowdown is showing on the balance-sheet. During the quarter ended March 2008, India Inc reported the lowest net profit growth in the last nine quarters, after the state-owned oil marketing and power companies declared poor results.
With the rupee showing a freefall and hitting a 28-month low against the dollar, India Inc has yet another headache.
As a result, new projects may have to be put on the backburner.
Embedded redemption premium and 36 per cent depreciation in five years will realise forex losses worth Rs 67.2 billion.
Among the sectors, the survey has projected IT, pharma and life sciences, and ITeS among those looking to effect the highest increase in salaries.
Volatility in local share markets have hit India Inc's equity fund-raising plans, with the total deal value this year set to fall below the level seen in 2008.
The current turnover of the group is nearly $68 billion.
Recession-hit India Inc may not have done well in terms of Profit After Tax (PAT) growth in the previous fiscal, but FY 10 could see it clocking a robust over 77 per cent growth in PAT, an economic think-tank forecast in its latest report.
The rising credit costs in tight financial markets have hit India Inc's plans to raise funds through external commercial borrowings (ECBs) and foreign currency convertible bonds (FCCBs). The borrowings through this route dipped to $ 862 million in February 2008. Indian companies raised $ 2.24 billion in November 2007, $ 2.26 billion in December 2007 and $ 1.88 billion in January 2008, according to the Reserve Bank of India data. The total ECB flow in Apr-Dec 07 was $ 16.3 bn.
A slowdown in the global economy and the rupee appreciation are expected to hit India Inc's job recruitment plans as the country's employment outlook dipped by six points to 74 points in the April-June 2008 quarter. The business outlook dropped by 9 per cent to 70 points, according to staffing agency TeamLease Services' quarterly Employment Outlook Report.
Leaving behind the luxe life and dapper suits of foreign banks, Puri and his team at the upstart venture shared fizz drinks, wore a footwear brand popular among the middle class, shared a rat-infested space in a yet-to-be gentrified work space to plan and execute it.
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