Indian industry’s sales levels, profit margins drastically go down: IIM-A survey

CV News/ Thursday, May 02, 2019

The latest Business Inflation Expectations Survey (BIES) of the Indian Institute of Management-Ahmedabad (IIM-A) has revealed that in March 2019, nearly 3/5ths of the firms in the sample reported that sales are ‘somewhat or much less than normal’, and the proportion of firms that reported ‘much less than normal’ sales has increased sharply to 38% in March 2019.
The BIES report further said that the proportion of firms in the sample reporting ‘normal or greater than normal’ profit margins has declined further to 33% in March 2019 from 38% in February 2019, the This is primarily due to sharp increase in the proportion of firms reporting ‘much less than normal’ profit in March 2019, it added. The results are based on the responses of over 1600 companies.

The survey report also said, “One year ahead business inflation expectation, as estimated from the mean of individual probability distribution of unit cost increase, has increased to 3.68% in March 2019 from 3.55% observed in February 2019”, adding, “Uncertainty of business inflation expectation in March 2019, as captured by the square root of the average variance of the individual probability distribution of unit cost increase, has remained elevated at 2.34% (same as observed in February 2019).”
Regarding cost perceptions, around 57% of the firms in March 2019 reported that increase in costs has been more than 3% (further up from 54% reported in February 2019). And the proportion of firms perceiving significant cost increase (more than 6%) in March 2019 has gone up sharply to 32% as compared to 27% in February 2019.