In spite of the buoyant overall business sentiments, Indian corporations, mainly in the services sector, appear to be pessimistic on sales for the next six months and expect pre-tax profits to be flat, apprehensive of rising cost of labour and raw materials, according to NCAER.
In its Business Confidence Survey, National Council of Applied Economic Research, said about 65 per cent of the 581 respondents to its survey felt that overall economic conditions would be better in the next six months and about 64 per cent viewed export prospects to be better.
The Delhi-based institution said around 64 per cent of the respondents hoped that financial position of the firms would improve during the next six months.
"Even while business sentiments showed considerable improvement, the firms' sales growth projection for the next six months appears "somewhat subdued", especially for the consumer non-durable segment, NCAER said.
The proportion of consumer non-durable firms expecting their sales to grow, had decreased from 73.7 per cent in the previous round to 68.9 per cent in current round, it observed.
Both services and consumer durable sectors expect a fall in production during the next six months, it said.
While the proportion of firms belonging to the consumer durable and non-durable sectors expecting their pre-tax profit to go up has increased, "no such tendency is visible for firms belonging to other sectors like intermediate, capital and services."
"In fact, the proportion of firms reporting their pre-tax profit to remain unchanged during the next six months has increased," it said.
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