Indian companies' profit margins, sales levels lowest since May 2017: IIM-A survey

Profit margins (% responses)

By A Representative
An Indian Institute of Management-Ahmedabad (IIM-A) survey has said that around 55% of the firms in June 2019 reported that increase in costs has been more than 3% during the last one year, adding, the proportion of firms perceiving significant cost increase (more than 6%) in June 2019 has increased noticeably to 31% as compared to 26%reported in May 2019.
The “Business Inflation Expectations Survey” (BIES), based on responses from over 1,600 companies, further says that in June 2019, almost three-fourths of the firms (highest ever since the inception of the survey in May 2017) in the sample reported that sales are ‘somewhat or much less than normal’. This proportion has increased significantly in June 2019, it adds.

Sales levels (% response)

The survey further says, for the first time since May 2017, the proportion of firms in the sample reporting ‘much less than normal’ profit margins has crossed beyond 50%. On the other hand, the proportion of firms in the sample reporting ‘normal or greater than normal’ profit margins has declined significantly to 24% in June 2019 from 30% in May 2019.Overall, the profit margin scenario has further worsened in June 2019, it adds.

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