India Inc braces for moderate shocks
Companies in information technology, textiles, infrastructure and real estate are looking at moderate to severe slowdown in growth. Suprotip Ghosh reports.business Updated: Sep 25, 2008 21:16 IST
With US on the verge of recession, India Inc is feeling the tremors. Companies in information technology, textiles, infrastructure and real estate are looking at moderate to severe slowdown in growth.
Particularly at risk are industries that hogged lion’s share in the US markets.
On top of the R-hit list are textile companies. “I feel the implications of the current financial tumble in the US are severe for many Indian textile companies dependent on US for their business,” said Rahul Mehta, president of Clothing Manufacturers Association of India (CMAI).
As US demand falls, textile exporters expect a cut in demand in the world’s largest market. This could result in dip in profits for numerous Indian companies despite a fall in the value of the rupee against the dollar. Around 30 per cent of the garment revenue depends on the US.
Others are worried too. “If the US recession touches other countries that buy from India, then it would have an obvious effect on the Indian industry,” said Rahul Bajaj, chairman, Bajaj Group and MP, Rajya Sabha. “We are not entirely decoupled from the US economy. But we are less affected than many other countries.”.
It will take some time, though. “As of now, our order book is full for six months,” said Rajan Hinduja, MD Gokaldas Exports, almost half of whose Rs 1,200 crore turnover comes from the US. “We feel that consumer shopping may go slow down.”
(With inputs from Saurabh Turakhia)