Below is a verbatim transcript of the interview
Q: Reading out a few of your takeaways. For this January to March quarter you are expecting volume of sales to go up 78 percent, net profits are also at 11 quarter high. New orders are also at an 11 quarter high. What is giving the business side of the community so much confidence and can it sustain through the year?
A: Dun & Bradstreet Composite Business Optimism Index stands at around 157.1 for the January-March 2014 quarter which is around 16.6 percent higher than the previous quarter and 7.1 percent higher than the same quarter last year. The reading is almost 11 quarter higher in previous year.
The survey, we have done in the month of December, where we have got the current account deficit (CAD) data which was significantly low. In fact, lower than the expected number, there has been some improvement on the investment front given the Cabinet Committee on Investment (CCI) approvals and clearance about the major product, till mid-September 2013 more than 200 projects cleared.
Also, RBI did not increase interest rates, so that has given us some fresh hope for the economic consolidation as recovery thereafter during the month of December and that serves as a trigger point for increasing the optimism level in the companies. We are a wee bottomed out in terms of slowing down of growth. But as far as recovery is concerned there is still at least two quarter timeframe.
Till election is over we have entered into the phase of consolidation and economic activity will consolidate, once election is over and we get the stable government and then policy is going on and policy reforms I think we are set for an economic recovery and it will continue thereafter.
Q: Wanted to focus on the new order activity then. Have you seen that customers are more confident about placing new orders and is there execution of orders as well taking off on the ground as opposed to just placement of orders?
A: These are just optimism for that particular quarter. We do see some improvement in terms of the new orders and the deliveries happening at the company level there are some improvements. As a result it is 11 quarter high. The best point here is that the significant surge in the intermediate sector are most optimistic if you look at the sectoral coverage which is good for the overall recovery of the economy because it acts as a leading indicator of the business cycle of the economy. So I think going forward new orders will pick up and convert a higher growth pack.
Q: About 78 percent of your respondents expect an increase in profits while 83 percent of them expect an increase in sales in the January to March quarter. This just tells us that it is going to be a positive growth most likely. Do you get a sense whether growth will be in 0-5 percent bracket? Will it be in the 5-10 percent growth that we could expect for revenues and profits?
A: On a revenue and profit front the growth differs depending on how we are shaping up in terms of the performance in the economy. The best thing is that if they are optimistic about the higher growth as compared to the same quarter last year, so if you take out what was the growth in the January-March 2013 quarter this growth will be slightly better than that in terms of revenue and net profit.
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