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| 'About 30% Indian cos managed to cut inventory build-up' |
| Press Trust of India / New Delhi May 03, 2009, 14:59 IST |
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Over 30 per cent of Indian firms have managed to limit their inventory build-up to less than 10 per cent resorting to production cuts due to lower demand in the wake of global recession, a survey said.
"Corporates have been able to limit the inventory build-up in their units to manageable levels, despite slackening export orders and sluggish domestic demand," PHD Chamber survey said adding that "more than 30 per cent of units have reported a low inventory build-up of less than 10 per cent".
However, it said, about 54 per cent of the units have unsold stocks leading to inventory pile up between 10-30 per cent.
"In sectors like textiles, chemicals, steel, metals, automobiles and building materials, about 15 per cent firms have an inventory load of 30 per cent, keeping in view the future demand which did not materialise," the study said.
The survey said subdued demand conditions and deferred purchases have led to idle capacity and inventories pile up for some units leading to locked up of capital and storage costs.
This have forced the companies to borrow money at high interest rates amid credit crunch, thereby, adversely affecting their bottomline.
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