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Sales, profits of Indian firms in Oct 2018 "much less than normal" compared to Sept: IIM-A

Cost levels
By A Representative
An Indian Institute of Management-Ahmedabad (IIM-A) survey has said, as of October this year, nearly 2/5ths of the firms in its sample reported that sales are ‘much less than normal’ in October 2018. "This proportion has sharply increased in this month from its average of around 30% observed during the last 4 months", the IIM-A survey says.
The survey further reveals that 47% of the firms in the sample in October 2018 indicated ‘much less than normal’ profit margins. "Proportion of firms reporting ‘normal or above normal’ profit has remained unchanged at around 30% for the last 4 months", it adds.
At the same time, the survey results show, the proportion of firms perceiving significant cost increase has slightly come down to 34% in October 2018 from 38% reported in September 2018.
Profit levels
Called Business Inflation Expectations Survey (BIES), researchers of the IIM-A's sample is based on responses from top executives of over 1600 companies, mostly in the manufacturing sector, selected from the list of companies as available with the Ministry of Corporate Affairs (MCA).
Conceptualized by Prof Abhiman Das at IIM-A, BIES provides ways to examine the amount of slack in the economy by polling a panel of business leaders about their inflation expectations in the short and medium term. This monthly survey asks questions about year-ahead cost expectations and the factors influencing price changes, such as profit, sales levels, etc.

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