The first round of Business Today’s Business Confidence Index survey revealed that companies were enjoying pricing power, which the Reserve Bank of India had later said it would like to reduce through its policies as it was fuelling inflation. According to the latest survey, companies have not only lost pricing power but are now grappling with uncertainties on various fronts.
Nearly half of the 500 Chief Executive Officers and Chief Financial Officers surveyed saw no change in profit margins in the January-March quarter, while 59 per cent respondents say they expect business prospects to worsen in the first quarter (April-June) of fiscal year 2012-13. Sixty two per cent of the respondents say they believe the economic situation will worsen in the April-June months.
The BCI had slightly increased to 55.4 per cent in the January-March quarter from 52.3 per cent in the October-December quarter.
Respondents to Business Today’s Business Confidence Survey believe the business environment, which had picked up slightly in January-March quarter, threatens to slip again after Union Budget 2012-13. Production levels and investments, which were beginning to pick up, could slide as the Budget did little to allay concerns of fiscal consolidation.
In a prepared statement, Aroon Purie, Editor-in-Chief, India Today Group said, “Over the past five quarters, the Business Today Business Confidence Index has taken firm root as a bellwether indicator of the mood in corporate India,”
He further said, “It looks back as well as forward and presents a very accurate and early indication of how recruitment, capital expenditure, profit and loss expectations and sales volumes will fare in the months ahead in different sectors of the economy. Business Today keeps its finger on the pulse of business, and the Business Confidence Index epitomises this expertise.”
The survey, launched in April 2011 and carried out quarterly, captures early signals that decision-makers in business can make use of.