India Inc's optimism index for Q4 up by 2%: D&B report

NEW DELHI: The underlying business sentiment continues to be resilient as India Inc's optimism index for the fourth quarter of this year has registered an increase of 2 per cent over last year, says a Dun & Bradstreet report.

The Business Optimism Index ( BOI), which measures the pulse of the business community, stood at 137.6 for Q4 2014, an increase of 2 per cent as compared to Q4 2013.

On quarter-on-quarter basis however, it has witnessed a marginal decline, largely due to a steep fall in optimism with regard to selling prices.

"Price competition in the face of subdued demand is deterring firms from raising prices even as input costs remain high. That said, the buoyant sentiment regarding volume of sales and new orders augurs well for future growth," Dun & Bradstreet India President and Managing Director Kaushal Sampat said.

Based on the responses received, it was observed that four out of the six optimism indices namely -- Volume of Sales, New Orders, Net Profits and Employee Levels have registered an increase as compared to Q4 2013.

"Going forward, improvement in business confidence is contingent on addressing structural issues in areas such as coal supplies and agriculture, simplification of business and taxation rules and resumption of various stalled projects," he added.

For calculating the composite BOI, each of the six parameters -- net sales, net profits, selling prices, new orders, inventories and employee levels -- is assigned a weight.

The parameter weights are then applied to these ratios and the results aggregated to arrive at the Composite Business Optimism Index.