India Inc expects growth in sales and profitability to pick up by the year-end in sync with an uptick in the big macro picture, according to a survey.
However, the survey also noted that private sector remains elusive with regard to pumping in fresh investment due to continuous under-utilisation of capacities.
The Assocham Bizcon Survey revealed that as many as 65.5 per cent companies expect macroeconomic parameters to look up by December.
Along with it, an equal percentage of the firms across different sectors said the performance at the industry level would also pick up with a consequence that there would be better sales realisation and improvement in profitability.
“The survey tells us how things would look up in the next six months, mainly on the back of uptick in consumer demand helped by good monsoon. If consumer prices ease after the monsoon plays out, we can even hope for the interest rates to moderate,” Assocham Secretary General D S Rawat said.
“Fortunately, crude oil prices continue to remain muted despite threats of a rebound earlier.”
According to the survey, there was a shared optimism by 69 per cent of the respondents about better prospects even at the individual firms’ level, translating into overall corporate earnings in the coming two quarters.
However, it indicates that industry is not confident about its own investment plan as 37.9 per cent of respondents believe that domestic investment may increase or there will be no change in the shorter horizon.
“Thus there seems to be a continuing lack of appetite for new investment in the private sector,” it said.
Though fresh employment generation has so far remained a challenge, about 41 per cent of the corporate respondents expects pick up in job creation. In terms of wage costs scenario majority of the industry respondents (65.5 per cent) feel that it will increase in future also.
The survey seems to reflect that in terms of the domestic investments, there has been no change in the firm investment plans in April to June 2016 quarter.
However, problem of high debt in certain key infrastructure and commodity sectors continues to persist. As many as 350 companies across different sectors were surveyed.
The survey results showed that the industry feels the top five most important actions needed to accelerate economic activities are: Infrastructure development – considered to be the most important measure to revive industrial growth, effective policy reforms, reducing cost of borrowing, clearance of stalled projects, and inflation.