India Inc’s optimism continues to surge with the index scaling to a three year high. The buoyant sentiment regarding future demand conditions, reflected in the fourteen quarter high resultant optimisms for volume of sales and new orders, which imparts confidence.

Strengthening profit expectations of the Indian corporate sector since the last three quarters underscores the robustness of the confidence apparent in the domestic economy currently. Though the growing optimism regarding selling prices points to improving demand conditions, it also underscores the gradual building up of inflationary pressures.” said Kaushal Sampat, President & CEO, Dun & Bradstreet – India. “Given that mounting inflationary pressures continue to be a significant downside risk to growth, how inflation pans out in the ensuing months would play an important role in shaping business sentiment in the near future. Going forward, the RBI’s monetary policy stance in the next policy review and the Government’s proposals for the corporate sector in the forthcoming Union Budget will play a key role in determining business expectations.” he added.

The domestic demand conditions are expected to witness further improvement, with as many as 91% of the respondents expecting their volume of sales to increase in Q1 2011. While only 1% of the respondents anticipate a decline in their volume of sales, the remaining 8% of the respondents expect volume of sales to remain unchanged. The resultant Optimism for Volume of Sales stands at a three and a half year high of 90% – an increase of 8 percentage points as compared to the previous quarter.   Source:  D&B India