NEW DELHI, Feb 16: A survey by the PHD Research Bureau today said the long run prospects of business in the country are bright as a huge proportion of corporates (80 per cent) have plans to expand their businesses in the next three years.
However, 20 per cent of the respondents did not indicate their interest in expanding their businesses in the coming three years.
The study ‘PHD Business Barometer 2013-14′ was undertaken to understand the business outlook across various segments of the country in the coming financial year.
During the course of the survey, a sample size of 277 was chosen which included responses from the senior management of large, medium and small corporate houses across the country.
According to the survey, capacity utilisation of 21 per cent of respondents firms lies within 50 -70 per cent, whereas 64 per cent of the respondents observed that their capacity utilisation lies within 70-90 per cent, and the remaining 15 per cent of the respondents said that it lies within the range of more than 90 per cent.
Majority of the corporates who have plans to expand their businesses in the next three years were bullish on India’s agro & food processing sector, pharmaceutical and health care, FMCGs and infrastructure development, especially logistics and software services. Among these respondents, 23 per cent wanted to expand business in agro & food processing sector, 17 per cent in pharmaceuticals & health, 14 per cent in the FMCG sector, 9 per cent in infrastructure, 9 per cent in IT & ITES and 8 per cent in others.
This positive outlook towards business expansion has been attributed to the anticipation of moderating borrowing costs in the coming years. The survey revealed that a large proportion of the respondents (70 per cent) felt that it will decline in the coming years, whereas 23 per cent of the respondents believed that it will remain same and the remaining 7 per cent held the view that it will increase moderately during the same period.
They were of the view that recent reforms unveiled by the government are encouraging. These announcements have positively impacted investment sentiment; however, it needs to be translated into effective implementation to convert sentiment into concrete investment decisions which would in turn help kick start industry growth momentum.
The survey says effective policy interventions and reform initiatives would pave the way for greater investment intentions by the corporates. It says time is opportune to provide greater policy environment that will reassure investors’ confidence with promises to open more avenues for projects, policies, products and partnerships.
The survey also noted that corporate India was optimistic in their view of business turnover as the majority of the respondents (80 per cent) were of the opinion that their company turnover will increase of which around 34 per cent of the respondents felt that it will increase sharply in the coming years. However, another 20 per cent felt that it will remain same during the same period.
(UNI)
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