India Inc expecting higher sales, profitability in H1 of FY17: Assocham survey

India Inc is optimistic about the economy's performance in the next six months, leading to higher sales and profitability on the back of uptick in the company order-book and capacity utilisation, says a latest Assocham Bizcon survey.

The optimism is reflected both at the levels of firms and the industry, for April-September period even though fresh investments and better employment opportunities are still to come, noted the survey conducted by the Economic Research Bureau (AERB) of the Associated Chambers of Commerce and Industry of India (Assocham).

"As many as 57.1 percent of the respondents in the survey conducted across different industry segments shared a sense of optimism about the economy for next six months. At the firm level, 61.9 percent respondents feel confident about the same," the survey said.

The survey looked at nine key parameters, including sales, profits, inventories, investments, employment, cost of raw material, electricity and fuel cost, wages and cost of credit.

Breaking the first half of the fiscal 2016-17 into two quarters, 66.7 percent of the respondents feel the April-June 2016 quarter sales value would pick up. Similarly, there would be an improvement in the profitability as well, the survey noted.

However, a large part of India Inc still feels that the present state of economy and its undercurrent has not changed much qualitatively as compared to the previous six months on the back of stagnant wages, electricity and fuel costs.

"Since the industry has been operating much below its capacity for a long period, there would still be a lag for fresh investment while a pickup in increased employment would still be away," Assocham President Sunil Kanoria said.

Going forward 47.6 percent of the industry respondents feel that the wage costs will not change in the April to June 2016 quarter.

A majority of the industry (57.1 percent) expects that there will be no change in the electricity and fuel cost in April to June 2016 quarter.