That Sinking Feeling ; the Third Quarter Results Confirmed the Worst Fears That the Slowdown has Hit Companies Hard. And the Next Quarter Is Likely to Be Worse.

Summary

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The global liquidity crisis had its most severe impact on the Indian economy in the quarter ending December 2008. The aggregate results of 780 companies, excluding banks, tracked on CMIE's Prowess have shown significant contraction in revenue growth and a big dip in operating and net profits. The slump has registered more or less across all sectors, with some sectors faring much more poorly than others. Does that mean that Indian industry is now over the hump? Well, some sectors are slated to post better numbers in Q4 2008. However, industry experts seem to differ in their prognosis for the future, painting an uncertain picture of how and when the Indian economy will climb out of the doldrums.

The biggest reason for the big drop in revenue growth for India Inc. from 35.08 per cent to 10.47 per cent in the third quarter ending December 2008 was because of a slump in sales in the manufacturing sector. This was primarily because of a steep fall in commodity prices,dramatically altering the profitability of companies like aluminium manufacturer Hindalco and Tata Steel.

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That Sinking Feeling ; the Third Quarter Results Confirmed the Worst Fears That the Slowdown has Hit Companies Hard. And the Next Quarter Is Likely to Be Worse.

Many automakers were forced to shut their factories for days towards the end of 2008 due to rapidly accumulating inventory, leading to a big fall in revenue growth. The worst hit were comm...

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