Skip to main content

Over 70% of Indian firms report below-normal profits amid cost surge

By A Representative 
Indian businesses sharply raised their inflation expectations in April 2026, with one-year-ahead unit cost increase projections jumping by 57 basis points to 5.64%, up from 5.07% in March 2026, according to the latest Business Inflation Expectations Survey (BIES) conducted by the Misra Centre for Financial Markets and Economy at IIM Ahmedabad. This marks the third consecutive month that firms have held inflation expectations above 5%, a phenomenon last observed only after August 2022.
Businesses also revised upward their projections for consumer price inflation. One-year-ahead CPI headline inflation was expected at 4.94% in April 2026, rising by 24 basis points from the 4.70% recorded in February 2026. Uncertainty around both unit cost and CPI inflation expectations has remained elevated, with the standard deviation of unit cost expectations staying above 2% for four consecutive months and CPI uncertainty holding above 1% since February 2026.
Cost pressures on the ground continued to mount. The share of firms reporting costs rising by more than 6% compared to a year ago climbed to 46% in April 2026, up from 44% in March 2026. Despite rising costs, business revenues have not kept pace. Around 57% of firms in April 2026 reported sales levels as "much less than normal" or "somewhat less than normal," with subdued sales persisting across the six-month period from November 2025 to April 2026.
Profit margins have borne the brunt of this squeeze. More than 70% of firms in both March and April 2026 reported profit margin expectations as "somewhat less than normal" or worse. The combination of elevated cost expectations, weak sales, and compressed margins points to a broad-based strain on Indian businesses entering the first half of 2026.
The BIES, now in its 108th monthly round, surveys around 1,000 companies drawn primarily from the manufacturing sector and is designed to capture the inflation expectations of price-setters rather than consumers, providing an indirect gauge of overall demand conditions in the economy.

Comments

Post a Comment

TRENDING

Tribal rights under siege: Roundtable Seeks strong legal defence of land, jobs and PESA

By A Representative  Tribal rights activists, legal experts, tribal leaders, former officials and civil society representatives from Andhra Pradesh and Telangana have called  for urgent action on tribal land rights, employment and PESA safeguards. They were participating in  roundtable on Constitutional Safeguards for Scheduled Tribes in the Telugu States at the Centre for Economic and Social Studies (CESS), Hyderabad. Former Governor Ch. Vidyasagar Rao chaired the deliberations.
Post a Comment
»

The indirect toll: How US debt and dollar dominance shape Bangladesh's economy

By Md. Abu Saim*  The United States' federal debt has crossed $40 trillion. The number is almost impossible to comprehend. To put it in perspective, it equates to roughly $117,000 per American—and it would take nearly 110,000 years to repay at $1 million per day.
Post a Comment
»

Kamal Mitra Chenoy, scholar and student activist who never stopped being both

By Harsh Thakor*  Professor Kamal Mitra Chenoy, who taught comparative politics and the Indian Constitution at the School of International Studies (SIS), Jawaharlal Nehru University, died on October 11. He was 75. A political scientist and public intellectual, he was known for his work on international relations, peace and conflict resolution, human rights and democratic values, and for his solidarity with students.
Post a Comment
»