The Dun & Bradstreet INDIA Composite Business Optimism Index stands at 142.8 during Q2 2010, a substantial improvement from an all time low level of 93.8 registered during Q2 2009.   On a q-o-q basis, the Composite Business Optimism Index increased by around 3.8% during Q2 2010, as against a decline of 3.9% (q-o-q) during Q1 2010. While the overall business sentiment continues to remain optimistic, some cautiousness on account of high inflation and expected hardening of interest rates is visible from relatively lower optimism with regards to Volume of Sales, New Orders, Net Profits, Employee levels during Q2 2010 as compared to Q1 2010. 

Relatively lower optimism regarding profit expectations could be attributed to rising raw material prices, hike in excise duty (incase not passed on to consumer) and MAT, which might have some impact on profitability. On a y-o-y basis, however, the Resultant Optimism for all the six parameters has witnessed substantial improvement.

“The recent trend in the BOI shows a significant improvement in business sentiment after it touched a trough of 93.8 during Q2 2009. On a y-o-y basis, the BOI has registered a substantial increase of 52% during Q2 2010. While the business confidence has continued to rise during Q2 2010, some signs of cautiousness are visible in the relatively lower resultant optimism for Volume of sales, Net profits and New orders as compared to Q1 2010. Concerns of high inflation and expected hardening of interest rates is likely to have limited the exuberance in the business sentiment,” said Kaushal Sampat, President & CEO, Dun & Bradstreet – India.

BIIA Newsletter May I – 2010 Issue