Q1 Results: A Wake-Up Call
7/26/2012 11:44 AM Thursday
From a downgrade in the outlook on India by a few rating agencies to renewed concerns of a double-dip recession in the US, along with the Euro zone worries that are still rearing their heads, the domestic as well as global markets have been
in a tizzy over the past few months. Add to this the issues on the domestic front, including the tepid economic data along with policy paralysis and an internal tiff between the UPA allies that is creating uncertainty, and the scenario has certainly not been encouraging for India Inc.
Just to quantify a few facts on the economic data front, the IIP registered a miniscule growth of just about 0.1 per cent in April 2012, improving marginally to 2.4 per cent in May 2012. The June figures are not expected to be any better either, clearly indicating that industrial production has been severely impacted.
Despite such a setback, the RBI has hardly budged, maintaining status quo on the interest rate front as inflation continuously remained above the bank’s comfort levels. While the WPI figures for April (7.23 per cent), May (7.55 per cent) and June (7.25 per cent) remained obstinately above the seven per cent levels, the situation was even worse in case of the CPI. The CPI data for April (10.36 per cent), May (10.16 per cent) and June 10.02 per cent) continued to haunt investors. It is hardly a wonder then, that the impact of all this was seen on the country’s GDP growth rates, with most leading research houses revising their GDP targets for FY13 downward to below seven per cent levels.
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