Corporate Sector Developments
The performance of the corporate sector during the first half of 2008-09 depicted a modest picture, as corporate earnings growth has begun to slowdown due to growing interest burden and considerable rise in expenditures owing to sharp increases in input costs. Interestingly, while sales have grown at a higher rate, partly reflecting higher prices, the net profit growth has decelerated significantly during the first half of the current financial year as compared with that in the first half of 2007-08. The share of consumption of raw materials as well as that of staff cost in sales has been higher as compared with the previous first half reflecting input and wage cost pressures. The mark-to-market losses by a number of companies on their foreign exchange transactions/loans on fears of rupee appreciation also have contributed to the sluggish profit growth. The half yearly performance varied across sectors, sales growth in several segments witnessed a slowdown in the first half of the current fiscal. Companies of cement, automobiles, auto components and textile industry saw a significant slowdown, while the sectors, which have performed well in terms of sales, are sugar, telecom, entertainment, engineering and paints.
Business Expectations Survey According Reserve Outlook Bank’s Survey to the
Agency NCAER Table 11.1: Business Expectation Index (in%) Period Index Growth over A year Previous Ago Round -8.8 -20.3 -4.4 -28.1 -15.4 -5.1 -2.6 1.8
July-December Business 2008 Expectation Index July-December Business FICCI 2008 Confidence Index October-December Business RBI 2008 Expectation Index Dun & July-September Business Bradstreet 2008 Optimism Index Source: Macroeconomic and Monetary Developments, October 24, 2008, Page 12, RBI.
manufacturing companies in the private sector, the business
expectations index (BEI) based on assessment for July–
September 2008 and that based on expectations for October-...