India Inc witnessing sharpest earning decline in 20 yrs
25/08/2016 12:54
According to media reports, global financial services giant Morgan Stanley has said that Corporate India is experiencing the most severe drawdown in earnings in two decades, breaking the 2001-02 and 2008-09 levels.
Morgan Stanley sees no end to the pain for India Inc. in the near-term, warning that a deteriorating global outlook in the wake of Brexit jitters, continued China slowdown, weakness in Europe and potentially higher US interest rates, are acting as an additional drag on Indian earnings, the recovery in which is likely to be delayed by nearly four quarters.
“India has been in its worst earnings drawdown since we have the data (from 1996)”, Morgan Stanley stressed in a report, the PTI reported.
Despite positive progress on reforms and fiscal deficit, from policymakers, a collapse in global trade and deep factory gate deflation is hurting profitability at India Inc.
Additionally, anemic global growth “has acted as an additional drag on Indian earnings and remains a key risk to an earnings recovery”, the report added.
