Notwithstanding the uninspiring performance in FY-12, the improvement in India Inc's profit in the latest March quarter offers hope.
After declining sharply in the earlier two quarters, profits grew, albeit only marginally in the March quarter.
Moderation in core inflation which impacts the manufacturing sector may have helped. Even on a sequential quarter basis, the revival in profits in the March quarter after dipping in the earlier periods suggests a possible change in fortunes.
However, it remains to be seen whether this sustains in FY-13. Supporting factors include the recent sharp fall in price of commodities such as crude oil, and expectations of rate cuts by the RBI to spur growth.
But the recent steep depreciation in the rupee and the uncertain global economic outlook could throw a spanner in the works. The former will add to the trouble of import-intensive sectors, and the latter will make export-oriented sectors such as gems and jewellery and IT-software vulnerable.
Besides, the trend of falling sales growth, if it continues, could again dampen the profit growth of corporate India.
READ ALSO: India Inc in 2012: Down but not out
Keywords: India Inc's profit, manufacturing sector, inflation
Comments:
This piece reads more like the common astrologer's predictions, "your luck may be good but could also be not so good". BL needs to have more incisive and informative write-ups.
@ s.a.krishnan
please refer to the story "India Inc in 2012: Down but not out" for the first part of the story. the link to this is provided above.
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