Business growth in India Inc hoists in June
The pent-up demand of the post-Covid-19 second wave is a lot more boisterous than the Covid-19 first wave post period, as pointed out by the economists.
After FY21 that passed an excellent show, overcoming significant supply-side disruption, corporate India in FY22 is taut to turn in a good performance as the previous year. Although the inception might not have been great, the localised lockdowns and curfews give way to a joyous third quarterly.
The data of April-June is mixed. While the GST seems promising and robust, the sales, credit growth and manufacturing services have been lacking. The consumer-oriented companies comment that the sales growth has been better since June this year.
The business sales till September remain mundane, but there is definite hope for growth as the festive season sets in. As the economists noted, the sales after the covid-19 second way seem far less subdued than the post up period of Covid-19 first wave. But, there is also a large cohort of consumers who are insulated from the pandemic pressure and have substantial purchasing power.
With the rate of commodities coming down the precious year, elevating it in the current year will push up prices of raw materials and the inflation of the prices in all the other sectors bruising the household budgets already. However, the surging prices should not cost much as many other companies are deleveraging themselves.
As the Q1 of FY21 was a complete washout, the current period is expected to meet more similarities with Q1FY22 and the march quarter of 2021.
KIE, Kotak institutional institutes expects net profits to increase by 152% year-on-year, but on a sequential basis, the profit is expected to fall by 11% due to lower volumes and high raw material costs. However, sectors led by IT, banks and metals, are expected to be fine.