Indian services cos most optimistic about profit growth among BRIC nations
The spring 2008 KPMG Business Outlook Survey, which covered around 1,400 service sector firms in the 4 countries, shows there is optimism regarding robust business growth in India.
By TNN |
MUMBAI/NEW DELHI: India���s services companies are the most optimistic among the four BRIC (Brazil, Russia, India, and China) nations about growth in profits and new business over the next year, according to a survey by advisory firm KPMG. The spring 2008 KPMG Business Outlook Survey, which covered around 1,400 service sector firms in the four countries, shows there is optimism regarding robust business growth in India, a sentiment reflected by other BRIC nations too.
Around 60% of those polled anticipate a rise in activity in their companies, compared with just 2% who expect a decline. Positive sentiment was most widespread among Indian firms. In India, the maximum growth in profit, employment and salaries is projected to be in financial services. This is followed by hospitality and tourism sectors.
Around 60% of those polled anticipate a rise in activity in their companies, compared with just 2% who expect a decline. Positive sentiment was most widespread among Indian firms. In India, the maximum growth in profit, employment and salaries is projected to be in financial services. This is followed by hospitality and tourism sectors.
| | Also Read |
| �� | |
| �� | |
| �� | |
| �� |
���India will see growth in retail financial services like asset management, life insurance and credit cards. The turbulence in financial markets will not affect this space since subprime crisis impacts lending, (and) not the fee-based income,��� KPMG chairman for new & emerging markets Ian Gomes said.
Optimism regarding new business was broad-based in all four BRIC nations. While about 56.8% Russian firms anticipate strongest growth in new business, in India almost 56% companies expect an increase in new business during the coming year. Further, of all the companies surveyed, about 55% anticipate a rise in profits over the next twelve months. Of these, Indian service providers predict the fastest profit growth, recording a strong net balance of more than 57.8%. ���Indian companies might raise their output prices to ensure profitable growth,��� Mr Gomes said.
More than half of the BRIC service providers expect sharp inflation over the next one year. More than 40% respondents in India predicted sharper inflation.
The survey also pointed out that Indian consumers may have to shell out more money for the services rendered to them over the next one year compared to the previous year. Prices charged by service providers are expected to rise at a faster pace as firms seek to rebuild operating margins.
Profits are expected to increase drastically in all six main sectors ���financial intermediation, post and telecom, transport and stor-age, renting, hotels and restaurants and other services. While China is expected to attract maximum investment, Brazil is the least attractive. With respect to staffing and recruitment, the service sector is all set to expand staffing levels strongly due to higher work-load. The financial intermediation sector was the least optimistic on this front.
ADVERTISEMENT
Positive sentiment and higher optimism was also most widespread among Indian firms with regard to new clients as well as investment in capital and staffing. New products and markets along with higher efficiency and low input costs will add to the bottom line of Indian service providers, though some companies felt competition could affect their profit margin.Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
