Significant growth seen in export markets
A significant economic recovery is on the anvil in 2021-22 as indicated by a CEOs poll conducted among 117 Senior CEOs at a recent meeting of the CII National Council. Majority of the CEOs polled, about 79% of them, expected GDP growth to be more than 8%.
On Capacity Creation in their own companies, 49% of the CEOs revealed that they are likely to make fresh investment this year, while 32% of them indicated fresh investment in next year, according to the poll.
Given that merchandise exports have reached US$131 billion during the period April to July 2021, majority of the CEOs polled indicated that Americas including the US and Canada will post significant growth in first half of the current fiscal year, followed by Europe, the Middle East, Africa and Asia Pacific.
“The CEOs poll clearly indicates significant recovery in corporate performance with both top-line and bottom-line growth expectations to be better than the pre-pandemic levels. The Government’s pro-growth initiatives and announcements has helped nurture the animal spirits of the corporate sector which has seen the worst economic shock of our lifetime,” CII Director General Chandrajit Banerjee said on 28 Aug 2021.
On expected revenue growth of their respective company, 46% of the CEOs expected more than 10% growth in the first half of the current fiscal when compared to the first half of pre-pandemic year 2019-20. Another 33% of them said that their company’s revenue growth will be up to 10% during first half of current fiscal when compared to the first half of pre-pandemic year 2019-20.
Sharing their expectations on net profit growth, 49% of the senior industry leaders polled indicated more than 10% net profit growth during first half of current fiscal when compared to first half of pre-pandemic year 2019-20. Yet another 32% of them expected their companies to register up to 10% growth in net profits for the first half of current fiscal when compared to the pre-pandemic year, 2019-20.
On capacity utilization for their respective industry sectors, about 51% of the CEOs indicated at least 5% to 10% increase in capacity utilization post second wave when compared to Pre-Covid levels. On their respective company’s capacity utilization, about 59% of the CEOs polled said that capacity utilization would be at least 5% to 10% more than the pre-pandemic levels.
Responding to the question on what is affecting the animal spirits of the private sector, majority of the CEOs (51%) indicated that Ease of Doing Business was still cumbersome at the grass roots followed by 32% of the CEO indicating that the Cost of Doing Business (other than Capital cost) is still being high. About one third of the CEOs indicated that current capacity is still in excess of demand.
“About 70% of the CEOs polled expected inflation at about 6% during the year 2021-22 which is within RBI’s inflation range and should help RBI retain low interest rates to promote growth”, Banerjee said. #economy #investment #profit #exports #manufacturing /fiinews.com
