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While expectations of monetary tightening are pervasive, given the sharp increase in inflation and heightened inflation expectations, the overall outlook for the first half (H1) of this fiscal (FY23) looks robust, says a recent poll of Indian CEOs, a large share of which expects a further depreciation in the rupee and expects it to stand at more than ₹80/US dollar during H1. Fifty five per cent of them also expects exports to benefit from it and perform better in H1 versus last year’s levels.
The survey was conducted by the Confederation of Indian Industry (CII) among its top industry CEOs.
While expectations of monetary tightening are pervasive, the overall outlook for H1 FY23 looks robust, says a recent poll of Indian CEOs, a large share of which expects a further depreciation in the rupee and expects it to stand at more than ₹80/US dollar during H1. Fifty five per cent of them expect their exports to benefit from it and perform better in H1.
A major share of the CEOs revealed an upbeat sentiment- as 44 per cent of them felt their company’s revenue growth would be in the range of 10-20 per cent during H1 FY23, followed by another 32 per cent anticipating a bigger jump in revenues—of more than 20 per cent during the period.
This optimism was echoed on the profits front as well, with 45 per cent of the CEOs indicating that their company’s profit growth is likely to increase by more than 10 per cent, closely followed by 40 per cent of them who believed that profit growth may stand slightly lower, up to 10 per cent, during H1 FY23.
These findings were released at CII’s Second National Council Meeting for FY23 in Delhi, which saw participation of 136 CEOs.
“The CII CEOS Poll results clearly demonstrate the resilience of Indian industry and the positive business performance outlook both on domestic as well as exports front despite challenges of high inflation leading to monetary tightening, rising input prices and uncertain global economic conditions”, said Chandrajit Banerjee, CII director general, in a press release.
The survey revealed 46 per cent of the CEOs polled indicated that rising input prices would affect their profits between 5 per cent and 10 per cent during H1 FY23, followed by another 28 per cent of them, which expects a bigger hit to profits, between 10 per cent and 20 per cent.
However, when polled on their output prices, only 43 per cent of the CEOs indicated that their companies had increased output prices to accommodate the input price rise in recent months, while nearly 57 per cent of them absorbed the input price rise, and of these about 30 per cent improved efficiency thereby reducing costs of their output.
A majority of the CEOs expect improved job creation prospects in their companies during H1 FY23 as compared to the same period last year.
The survey respondents have also cited high inflation expectations as nearly half of them (48 per cent) foresee inflation to be in the range of 7-8 per cent during H1 FY23.
Nearly 64 per cent of them are of the view that now the state governments must act to reduce value-added tax on fuel after the cut in excise duty by the central government in May.
Gross domestic product (GDP) growth is expected to be in the range of 7-8.0 per cent as revealed by 57 per cent per cent of the CEOs, while only 34 per cent of them anticipate below 7 per cent expansion in the economy.
About half of the CEOs felt rural demand would be better in H1 FY23 as against the corresponding period last year.
However, about 50 per cent of the CEOs indicated mild to moderate disruption in supply of inputs during the first half of the current year compared to first half of last year.
Fibre2Fashion News Desk (DS)
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