IMA Analysis

Tuesday May 4, 2021

India's Quarterly BCPI Q1FY22

A few weeks ago, we ran the Q1 FY22 round of our quarterly Business Confidence and Performance Index (BCPI) survey. From a multi-year high of 73 in the January quarter, the BCPI headline index has fallen to a still-high 60.6 this quarter. Pulling it down are Covid-related concerns and a tempering of business-performance expectations.

Reflecting the uncertainties created by the second wave, the macro index has plunged from a buoyant 85 to a tenuous 55. The business outlook has also weakened, though less markedly. Expectations around capital spends are relatively strong. 

Coming off a low base, FY22 will be much better than last year for the average company in terms of sales growth (rising from -1.5% to 15%) and net profit growth (going up from -0.2% to 11.7%). However, over half of our respondent companies are yet to ‘return to normal’ (pre-Covid levels), with BAU still months or even a couple of quarters away. Understandably, work-from-home ratios remain elevated and our members are busy fire-fighting the recent surge in infections.

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