FE inflows forecast crossing $91 billion

Fall in manufacturing sector profits seen

 The agency’s monthly macroeconomic report says this record spike is on the back of the massive inflow of US$30.4 billion in September quarter alone.

For foreign funds looking for high returns, on the back of dirt-cheap funds from their homes markets, where returns are negligible, India and especially its stock markets have been the hot cake. In September-October alone, they had pumped in nearly US$13 billion into the domestic equities.

The report says portfolio investments are alone expected to be of US$16.3 billion during the April-October period, while overall inflows are expected to top US$28.5 billion during the period. Foreign Direct Investment is expected to be around US$15.7 billion during the April-October period, which is US$1.7 billion a month.

Centre for Monitoring Indian Economy (CMIE) has forecast a massive 18 per cent fall in profits for the manufacturing sector in December quarter.

This, it said, was driven largely by poor performance of the petroleum sector. In its monthly review of the economy, the agency says oil sector is likely to see a loss of Rs 1,248 crore during the quarter. It said the rest of the manufacturing sector is poised for a muted profit growth of 5.3 per cent during the period under review. The agency says that oil companies are set to log in this huge loss as the government is unlikely to compensate oil marketing companies the normal 50 per cent under-recoveries during the third quarter, pushing the sector into the red.

The report does not see any major industrial sector recording high profit margin in the third quarter, barring the commercial vehicles companies.

Even for fourth quarter, CMIE sees only a 10 per cent profit growth, but for the whole fiscal, it is likely to fall by 6.8 per cent as whole. The petroleum sector as whole will see its profits eroding by a massive 30.5 per cent during the fiscal, says the report, while the rest of manufacturing sector will close the fiscal with a modest 6.5 per cent jump in their bottomlines.

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