Pessimism continues to dominate India's business performance: IIM-A survey

Current costs per unit compare with this time last year: % responses

By A Representative
An Indian Institute of Management-Ahmedabad (IIM-A) survey, based on responses of around 1,300 companies, has found that the cost perceptions data suggest some early signs of “moderation” of cost pressures amidst Covid-19 crisis.
Called Business Inflation Expectation Survey (BIES), it finds that over 53% of the firms believe that the current cost increase is 3.1% and above as compared to the same time last year. Over 37% of the firms perceive that the current cost increase is over 6%. However, one-fifth of the firms still perceive that current cost increase is over 10%.

Sales levels: % response

According to the survey, over 75% of the firms in May 2020 report that sales are much less than normal as against over 81% firms reporting in March 2020, adding, around 92% of the firms in the sample report that sales are ‘somewhat or much less than normal’ as against 93% reporting in March 2020. This proportion has remained over 70% since June 2019.

Profit margins: % response

The survey further finds that over 75% of firms in the sample in May 2020 report ‘much less than normal’ profit as against 81% in March 2020, underlining, over 92% of the firms in the sample expect ‘much less than normal or somewhat less than normal’ profit margins. It adds, this proportion has remained around 75% since June 2019 till January 2020.

BIES report concludes, the survey suggests, there is "very little change in perceptions -- pessimism continues to dominate business performance."