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

Buddhist shrines massively destroyed by Brahmanical rulers in "pre-Islamic" era: Historian DN Jha's survey

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".

RSS' 25,000 Shishu Mandirs 'follow' factory school model of Christian missionaries

By Bhabani Shankar Nayak*
The executive committee of the International Union of Anthropological and Ethnological Sciences (IUAES) recently decided to drop the KISS University in Odisha as the co-host of the World Anthropology Congress-2023. The decision is driven by the argument that KISS University is a factory school.

India must recognise: 4,085 km Himalayan borders are with Tibet, not China

By Tenzin Tsundue, Sandeep Pandey*
There has as been a cancerous wound around India’s Himalayan neck ever since India's humiliating defeat during the Chinese invasion of India in 1962. The recent Galwan Valley massacre has only added salt to the wound. It has come to this because, when China invaded the neighbouring country Tibet in 1950, India was in high romance with the newly-established communist regime under Mao Zedong after a bloody revolution.

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur*
Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Time to give Covid burial, not suspend, World Bank's 'flawed' Doing Business ranking

By Maju Varghese*
On August 27, the World Bank came out with a statement suspending the Doing Business Report. The statement said that a number of irregularities have been reported regarding changes to the data in the Doing Business 2018 and Doing Business 2020 reports, published in October 2017 and 2019. The changes in the data were inconsistent with the Doing Business methodology.

Delhi riots: Cops summoning, grilling, intimidating young to give 'false' evidence

Counterview Desk
More than 440 concerned citizens have supported the statement issued by well-known bureaucrat-turned-human rights activist Harsh Mander ‘We will not be silenced’ which said that the communal riots in Delhi in February 2020 have not been caused by any conspiracy, as alleged by the Delhi Police, but by “hate speech and provocative statements made by a number of political leaders of the ruling party.”

WHO chief ignores India, cites Pak as one of 7 top examples in fight against Covid-19

By Our Representative
In a move that would cause consternation in India’s top policy makers in the Modi government, Dr Tedros Adhanom Ghebreyesus, World Health Organization (WHO) director-general, has singled out Pakistan among seven countries that have set “examples” in investing in a healthier and safer future in order to fight the Covid-19 pandemic.

Agricultural reform? Small farmers will be more vulnerable, corporates to 'fix' price

By Dibyendu Chaudhuri*
Agriculture employs 42% of the total work force whereas it contributes only 16% to the country’s GDP. The average annual growth rate in agriculture has remained static to 2.9% since the last six years. This means that the post-green revolution conventional agriculture has reached its peak. Responsiveness of soil fertility to fertiliser application, an indicator of stagnancy in agriculture, shows declining trend since 1970. The worst sufferer has been the small and marginal farmers who constitute 86% of total farmers.

Tata Mundra: NGOs worry as US court rules World Bank can't be sued for 'damages'

By Kate Fried, Mir Jalal*
On August 24 evening, a federal court ruled that the World Bank Group cannot be sued for any damage caused by its lending, despite last year’s Supreme Court ruling in the same case that these institutions can be sued for their “commercial activity” in the United States.