Skip to main content

IIM-A survey: Profit margins subdued, sales fail to recover, cost pressure builds up

By Our Representative
The latest Business Inflation Expectations Survey (BIES), carried by the Indian Institute of Management-Ahmedabad (IIM-A), has suggested that cost perceptions data show some early signs of cost pressures building up, with nearly 50% of the firms believe that the current cost increase is 3.1% and above, as compared to the same time last year. Around 1/4th of the firms perceive the current cost increase in over 6%.
As for the sales perception, the data do not show clear signs of recovery, the survey says, pointing out, in December 2019, around 72% of the firms in the sample reported that sales are ‘somewhat or much less than normal’ as against 68% reporting in November 2019. This proportion has remained around 70% since June 2019, it adds.
Referring to profit margins, the survey says, starting from June 2019, the proportion of firms in the sample reporting ‘much less than normal’ profit margins has remained above or around 50%, adding, overall, the profit margin scenario has remained subdued for over six months.
The survey, begun by Prof Abhiman Das in May 2017, claims to provide “ways to examine the amount of slack in the economy by polling a panel of business leaders”, adding, the monthly survey “asks questions about year-ahead cost expectations and the factors influencing price changes, such as profit, sales levels, etc.”
The questionnaire of BIES is finalized based on the feedback received from the industry, academicians and policy makers, with companies being selected primarily from the manufacturing sector. The results are based on the responses of over 1200 companies.
The survey report says, “One year ahead business inflation expectation, as estimated from the mean of individual probability distribution of unit cost increase, has remained unchanged at around 3.5% during November and December 2019.”
It adds, “Uncertainty of business inflation expectation, as captured by the square root of the average variance of the individual probability distribution of unit cost increase, has declined sharply to 2.00% in December 2019 from 2.39% reported in November 2019.”

Comments

TRENDING

India under Modi among top 10 autocratizing nations, on verge of 'losing' democracy status

By Rajiv Shah
A new report, prepared by a top Swedish institute studying liberal democracy, has observed that there has been a sharp “dive in press freedom along with increasing repression of civil society in India associated with the current Hindu-nationalist regime of Prime Minister Narendra Modi.” The report places India among the top 10 countries that “have autocratized the most”. Other countries that have been identified for rolling towards autocracy are -- Hungary, Turkey, Poland, Serbia, Brazil, Mali, Thailand, Nicaragua and Zambia.

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.

Gujarat link of controversial US doctor who 'forced' WHO quiz Trump's wonder drug

By Rajiv Shah
A top American doctor, Sapan Sharankishor Desai, born and raised in the “affluent” North Shore (Chicago) region of Illinois by Indian parents, at one point of time involved in NGO activity through  dedicated to “improving” the lives of the impoverished in Gujarat, is in the eyes of a major international storm following his paper (retracted) in a “Lancet” questioning Donald Trump-promoted drug hydroxychloroquine.

Border conflict? RBI nod India's 'brotherly' help to China internationalise its currency

By Bhabani Shankar Nayak*
In the middle of a global pandemic, China started an unprovoked border conflict with India. It unraveled trust deficit and ties between the two neighbours. As thousands of Chinese troops tried occupying Indian territory, the Narendra Modi-led BJP government directs the Reserve Bank of India (RBI) to allow the Bank of China to start regular banking services in India. The Bank of China will now operate in India like any other commercial banks.

Dalits in India, Blacks in US suffer 'similar' humiliation: Macwan drafts letter to Trump

Counterview Desk
Well-known human rights activist Martin Macwan, recipient of the prestigious Robert F Kennedy Human Rights Award in 2000, has drafted an open letter to US President Donald Trump following the disturbing turn of events with the murder of George Floyd, leading to widespread protests in the US. He has sought signatures of concerned citizens before sending it to Trump.

RSS supremo Deoras 'supported' Emergency, but Indira, Sanjay Gandhi 'didn't respond'

By Shamsul Islam*
National Emergency was imposed on the country by then Prime Minister Indira Gandhi on June 25-26, 1975, and it lasted for 19 months. This period is considered as ''dark times' for Indian democratic polity. Indira Gandhi claimed that due to Jaiprakash Narayan's call to the armed forces to disobey the 'illegal' orders of Congress rulers had created a situation of anarchy and there was danger to the existence of Indian Republic so there was no alternative but to impose Emergency under article 352 of the Constitution.

Hurried nod to Western Ghat projects: 16 lakh Goans' water security 'jeopardised'

Counterview Desk
Taking strong exception to "virtual clearances" to eco-sensitive projects in the Western Ghats, the National Alliance of People’s Movements (NAPM) in a statement has said urged for a review of the four-lane highway, 400 KV transmission line and double tracking of the railway line through the Bhagwan Mahavir Wildlife Sanctuary and Mollem National Park in Goa.

Clean chit to British rulers, Muslim League? Karnataka to have Veer Savarkar flyovers

By Shamsul Islam*
The BJP government of Karnataka led by BS Yediyurappa is going to honour Hindutva icon VD Savarkar by naming two of the newly built major flyovers in Bangalore and Mangalore after him. There was a huge uproar against this decision of the RSS-BJP government as many pro-Kannada organisations with opposition parties and liberal-secular organizations questioned the logic to ignore so many freedom fighters, social reformers and others from within the state.

Disturbing signal? Reliance 'shifting focus' away from Indian petrochemical sector

By NS Venkataraman*
Reliance Industries Ltd (RIL), a large Indian company, has expanded and grown in a spectacular manner during the last few decades, like of which no industrial group in India has performed before. RIL is now involved in multi various activities relating to petroleum refineries, petrochemicals, oil and gas exploration, coal bed methane, life sciences, retail business, communication network, (Jio platform) media/entertainment etc.