Private sector companies in India remain optimistic about demand conditions over the next 12 months, according to a private survey released on Wednesday.
New projects, product differentiation, advertising and tech investment are some of the key reasons behind this confidence, the survey mentioned.
The HSBC India Business Outlook, compiled by S&P Global, indicated that a net balance of 30% of companies expect output growth in the coming year. While this is lower than the 33% recorded in October 2024, the figure remains above the long-run and global averages.
"Optimism around business activity, profitability and employment softened a tad, but was stronger than global averages," said HSBC chief India economist Pranjul Bhandari.
Some respondents cited competitive pressures and client demand for lower prices as key challenges to the outlook.
The findings are based on responses from around 800 companies across the manufacturing and service sectors during the survey conducted in February. The report is produced three times a year, with data collected in February, June and October.
Confidence among both manufacturers and service providers declined from 33% in October 2024 to 29% and 30%, respectively, in February.
On a positive note, private sector companies are looking to expand their workforce. "At +13% in February, the net balance was above the emerging market (+3%) and global (+8%) averages," the survey said.
Services firms were more optimistic about job creation than goods producers.
"Manufacturers continued to remain more optimist around capital investment and R&D than their services counterparts," said Bhandari.
Capital allocation targets saw a slight dip, with the net balance of capital expenditure falling to 9% in February from 10% in October 2024. Among manufacturers, 14% planned capital investments compared with 7% service providers. Sentiment toward research and development was also stronger among manufacturers.
On the pricing front, relatively moderate cost pressures in India allowed businesses to implement more competitive pricing strategies in global markets. A net balance of 14% of private sector firms intend to raise selling prices, down from 19% in October 2024. "Expectations around price pressures softened considerably, and so did the prices charged," concluded Bhandari.
Source Name : Economic Times