Cost pressures to continue over next quarter: IL&FS

What do you make of the manufacturing numbers, which have come out so far? One is getting a sense that manufacturing companies are clearly experiencing margin pressures?

Vibhav Kapoor: Definitely, there is no doubt about that. That was well expected because we know that commodity prices have been going up very significantly for the past several months now and several quarters and at some point of time, they are obviously going to have an impact on the raw material prices here. Also interest costs have started to go up, they have gone up by as much as 200-300 basis points over the last year.

Companies are now finding it more and more difficult I would say to pass on these cost increases to consumers as inflation picks up more and more and that’s obviously is leading to a squeeze in margins for the manufacturing companies. Going forward at least for another quarter and maybe even more, you are going to see this cost pressures continue and maybe even escalate further.