India Inc’s Season of Cheer

It has been a long time since so much good news rained on corporate India

Tata Motors made a profit of Rs 513 crore, GlaxoSmithkline Rs 124 crore, NTPC clocked Rs 2,193 crore, why even Spicejet the low-cost airline managed some black ink in its books. It has been a long time since so much good news rained on corporate India. Add to that the RBI announcement that there are sure signs of an economic revival, and suddenly there is some optimism in the air. What is interesting is that profits have accrued across sectors. Wipro, the infotech major, made a Rs 978 crore profit, Dr Reddy’s announced a profit of Rs 244.5 crore and in banking ING Vysya had a net profit of Rs 41 crore. ING and Dr Reddy’s have in fact doubled their profits over the last quarter. “It is a very encouraging sign for the confidence of India Inc. The demand side has been strong and that has signalled resilience in corporate profits… I feel that the results are bound to help the economy come out of the worst part of the slowdown,” says Gunit Chaddha, MD of Deutsche Bank India. Nomura and Citibank in their reports on the second quarter results says that the results are surprisingly positive. The Reserve Bank also seems to be in a positive mood. It noted that India has had a recovery in industrial production and other trends such as increased foreign tourist arrivals. The surprisingly good show by corporate India could be a turning point for the Indian economy. If the monsoon makes up for its deficiency in its last leg—and there have been signs of that too—the economy could well be on the way to recovery. A slew of measures aimed at the real estate sector announced by the Government, will go the extra mile in helping this recovery.

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