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Corporate India's business optimism is at a 10-quarter low, says Dun & Bradstreet

Updated : July 15, 2019 08:48 PM IST

Business optimism of India Inc. is at a 10-quarter low in the July to September period, according to the Dun & Bradstreet Business Optimism Index that measures the pulse of the business community by surveying 400 companies across sectors to review their optimism across six key parameters.

CNBC-TV18 spoke with Manish Sinha managing director of Dun & Bradstreet to discuss the findings of the survey conducted in June.

Sinha said: "The business optimism index is just an index. To understand it, you would compare it with the same number the previous quarter, it used to be 78 in the previous quarter and the same quarter the previous year it was as high as 81. The important thing is the time series and the fact is that it has been declining."

He added: "It is a combination of six groups of things that our respondents talk about and unfortunately five of the six groups are on a downward trend. So the optimism is declining when it comes to the amount of sales that they are going to do, it is declining in terms of the amount of profit that they think they are going to make.

"Similarly, down in terms of selling prices, order book and employment that they plan to actually generate. The only place where it is actually not declining is in terms of inventory they expect to have but even there it is only flat. As regards to the package of industries that is captured within the index, it is six groups of manufacturing industries and six groups of service industries. So it is a picture of what the overall sector is telling us."

He added: "There are three sectors [where] we feel optimism is the lowest. It is definitely low in consumer non-durables, it is definitely low in the basic goods. When we say basic goods, we are actually talking about the end products that the customers buy. It is not so bad in capital goods where the volume of sales and net profit actually has a positive movement in the index.

"It is also not that negative when it comes to construction. In the case of construction we see a positive movement in terms of level of selling price that they expect to get and the level of stock but a negative movement in terms of new orders that they have received. So some sectors are quite negative, some sectors are little bit positive," he added.
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