Skip to main content

India's 65% firms report squeezing of profits, 50% plus say sales were less than normal: IIM-Ahmedabad survey

By Our Representative
An Indian Institute of Management-Ahmedabad (IIM-A) survey, based on responses from 1941 companies, has revealed that, while inflation and costs may not be issues with them, but squeezing profits and sales is surely bothering them. Called Business Inflation Expectations Survey (BIES), March 2018, it seeks to quantify “slack” that may have set into the India economy.
Providing a short and medium term perspective, the survey, carried out each month, asks questions about year-ahead cost expectations and the factors influencing price changes, such as profit, sales levels, etc.
IIM-A claims, “The survey is unique in that it goes straight to businesses, the price setters, rather than to consumers or households, to understand their expectations of the price level changes.”
As many as 44% of the firms in the IIM-A’s BIES’ 11th round survey indicate “much less than normal” profit margin, while over 65% of firms continue to report “squeezing of profit margins”, the survey report says, adding, “This proportion has remained more or less stable during last four months.”
Profit margins - % response
Pointing out that the “perception of higher profit margins in the current economic conditions is not supported by the data”, the report states, 28% of the firms in the sample reported that sales were “much less than normal”, and this proportion has been quite stable during last four consecutive months.
At the same time, the report says, over half of the firms in the sample continued to report that sales levels were “much or somewhat less than normal”, adding, “Overall data shows persistence of the pessimism about subdued sales conditions.”
Sales levels - % response
The IIM-A believes, “One major advantage of BIES is that one can get a probabilistic assessment of inflation expectations and thus can get a measure of uncertainty. It also provides an indirect assessment of overall demand condition of the economy.”
It adds, “Results of this survey are, therefore, useful in understanding the inflation expectations of business and complement other macro data required for policy making… The questionnaire of BIES is finalized based on the detailed feedback received from the industry, academicians and policy makers.”
Costs per unit compare with this time last year? – % responses
Companies, mostly in the manufacturing sector, were selected based on certain sampling criteria from the list of companies as available with the Ministry of Corporate Affairs (MCA).
As for inflation expectations, the report states, “One year ahead business inflation expectation in March 2018, as estimated from the mean probability distribution of unit cost increase, is placed at 3.73%, showing a decline from 3.85% observed in February 2018.”
One year ahead business inflation expectations (%)
It adds, “Uncertainty of business inflation expectations in February 2018, as captured by the square root of the average variance of the individual mean probability distributions, is estimated to be 1.99% (remained almost same as observed in February 2018).”
As regards cost perceptions, the report states, the data in does not indicate “significant increase” in costs, with “around 55% of the firms in reporting that “increase in costs has been more than 3% during the last one year. It adds, “This proportion has almost remained unchanged as compared to February 2018 data.”

Comments

TRENDING

Avoidable Narmada floods: Modi birthday fete caused long wait for release of dam waters

Counterview Desk  Top advocacy group, South Asia Network on Dams, Rivers and People (SANDRP), has accused the Sardar Sarovar dam operators for once again acting in an "unaccountable" manner, bringing "avoidable floods in downstream Gujarat."  In a detailed analysis, SANDRP has said that the water level at the Golden Bridge in Bharuch approached the highest flood level on September 17, 2023, but these "could have been significantly lower and much less disastrous" both for the upstream and downstream areas of the dam, if the authorities had taken action earlier based on available actionable information.

Biden urged to warn Modi: US can declare India as worst religious freedom offender

By Our Representative  During a Congressional Briefing held on Capitol Hill, Washington DC, Nadine Maenza, former Chair of the United States Commission on International Religious Freedom (USCIRF), has wondered why the Biden administration should raise issues of mass anti-minority mob violence  -- particularly in Haryana and Manipur -- with Modi. Modi should be told that if such violence continues, the US will be “compelled by law” to designate India as one of the world’s worst offenders of religious freedom, she urged.

From 'Naatu-Naatu' to 'Nipah-Nipah': Dancing to the tune of western pipers?

By Dr Amitav Banerjee, MD*  Some critics have commented that the ecstatic response of most Indians to the Oscar for the racy Indian song, “Naatu-Naatu” from the film, “RRR” reeks of sheer racism, insulting visuals and a colonial hangover. It was perhaps these ingredients that impressed the Academy of Motion Picture Arts and Sciences, one critic says.

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah*   The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual. 

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Asset managers hold '2.8 times more equity' in fossil fuel cos than in green investments

By Deepanwita Gita Niyogi*  The world’s largest asset managers are far off track to meet the  2050 net zero commitments , a new study  released by InfluenceMap , a London-based think tank working on climate change and sustainability, says. Released on August 1, the Asset Managers and Climate Change 2023 report by FinanceMap, a work stream of InfluenceMap, finds that the world’s largest asset managers have not improved on their climate performance in the past two years.

Savarkar 'criminally betrayed' Netaji and his INA by siding with the British rulers

By Shamsul Islam* RSS-BJP rulers of India have been trying to show off as great fans of Netaji. But Indians must know what role ideological parents of today's RSS/BJP played against Netaji and Indian National Army (INA). The Hindu Mahasabha and RSS which always had prominent lawyers on their rolls made no attempt to defend the INA accused at Red Fort trials.

Evading primary responsibility, ONGC decides to invest Rs 15,000 crore in sick subsidiary

By NS Venkataraman*  It is reported that Oil and Natural Gas Corporation (ONGC) will infuse about Rs 15,000 crore in ONGC Petro-additions Ltd (OPaL) as part of a financial restructuring exercise. ONGC currently holds 49.36 per cent stake in (OPaL), which operates a mega petrochemical plant at Dahej in Gujarat. GAIL (India) Ltd has 49.21 per cent interest and Gujarat State Petrochemical Corporation (GSPC) has the remaining 1.43 per cent.

Sales, profits of Indian firms 'deteriorate', yet no significant increase in cost pressures

By Our Representative  The Indian Institute of Management-Ahmedabad's (IIM-A's) latest Business Inflation Expectations Survey (BIES), a monthly exercise, has said that while cost perceptions data does not indicate significant increase of cost pressures, sales and profits of the Indian firms have deteriorated.

'State-sanctioned terror': Stop drone attack on Adivasis, urge over 80 world academics

Counterview Desk  A joint statement, “Indigenous Peoples’ Un-Freedoms and Our Academic Freedom: A Call for Solidarity”, endorsed by over 80 signatories, including international academics, activists and civil society organizations, as well as diasporic Indian academics and researchers, working with Adivasi (indigenous) communities in India, has made an urgent appeal to prevent future drone bomb attacks by the Indian state on Adivasi villages.