Thursday, 6 February 2014

Indian Economy : Reasons to Smile, yet Miles to Go 


India Inc has reported better Performance Results in December quarter, giving hope to Indians in general and India Corporate in particular. If we look at YOY results for overall revenue, it has grown by around 14%. The contribution to this healthy growth has mainly come from Pharma and IT sectors. The good part of this growth trend is that there has been a significant jump in the Operating Profit of around 18% along with an increase in margin to 19.5%, both on YOY. This trend has further dotted increase in bottom line which stands at 16% YOY. In my view, these positive results more so in relation to bottom line will provide required push to expansion planning to existing business in time to come and also, better environment to 'Invest in India' - both are required, given last few years of GDP growth fiasco.

Sectors like FMCG, Steel, Engineering & Construction which off late were not doing well comparative previous years; have shown good results in the quarter. One sector that is still in pain is Automobile. Only good thing which is making this sector ticking is that Two-wheeler segment is doing well, otherwise there is on-going downward trend in the volume for Trucks/LCV an even car segment.

We will get more clarity about the Economy, as we come to know the performance results of other companies in near future. However, the fate of Indian Economy in my view still hangs with result of General Election. We Indians get a stable, growth oriented Government, I wish for.

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