New Delhi, Feb. 13: India Inc is swelling with confidence and sounding upbeat about ratcheting up sales, profits and exports over the next six months.
The only worry is over the old bugbear: infrastructure bottlenecks.
In the third quarterly business confidence survey (BCS) conducted by the Federation of Indian Chambers of Commerce and Industry (Ficci), 83 per cent of the respondents have said the current overall economic conditions are 'moderately to substantially better' over the last six months. As many as 75 per cent of the respondents expect the overall economic conditions to remain moderately to substantially better in the next six months.
'With hopes of an industry-friendly budget and the optimism generated by the economic policy agenda, the next six months promise to be even more exciting, with sales, profitability and exports expected to spiral upwards,' says the survey.
For the first time in the current fiscal, all three indices showing current conditions and expectations have moved to the 'significantly optimistic zone', said Ficci president Onkar S. Kanwar.
Nearly 75 per cent feel that their industry will perform moderately to substantially better in the coming six months.
The percentage of respondents characterising their current industry performance as moderately to substantially better vis-a-vis the last six months has shot up from 59 per cent in the last round to 71 per cent in the present round.
The heavy industry is most upbeat about the future with 80 per cent of the respondents from hoping that their industry would perform 'moderately to substantially better'.
The current conditions index has registered a gain of 8.3 per cent ' from 67.8 per cent in the last survey to 73.4 per cent in the present. The expectation index has risen 9.7 per cent to 76.7 per cent.
Approximately, 52 per cent of the respondents expect a double-digit increase in sales over the next six months; 30 per cent see profits rising between 10-20 per cent; 21 per cent of the respondents anticipate an export growth of 20-30 per cent.
'Infrastructure glitches, however, continue to hound 60 per cent of the participating companies. The figure stood at 50 per cent in the last survey. The increase is a serious cause of concern,' says the Ficci survey.
At the firm-level, there is a distinct note of optimism with a whopping 83 per cent of the respondents saying they expect the performance to be 'moderately to substantially better' in the next six months.
In response to various enterprise-level parameters, 82 per cent expect 'higher to much higher sales', 23 per cent foresee an increase in selling prices, while another 59 per cent expect higher to much higher profits.
In addition, 46 per cent of the respondents said they expect higher to much higher investments, while another 25 per cent forecast a boost to employment in the same period. While 25 per cent of the respondents have forecast a higher to much higher employment, 63 per cent expect current levels to be maintained.
In another survey tracking the economy, Assocham says the steel industry has outperformed all others, showing a growth of over 150 per cent in net profit for the quarter ended December 2004. Hotels and cement companies are next.