Different Strokes for Different Folks!: Inflationary Trends Offer a Mixed Bag for
the Indian Market
MUMBAI, Nov. 20 /PRNewswire-AsiaNet/ --
As the Indian stock markets are feeling the heat of an economic meltdown,
there has been a dramatic dip in valuations, while the concurrently rocketing
inflation levels have sparked an escalation in interest rates. Money has been
progressively moving away from stock markets into safer investment destinations
such as fixed deposits and bonds.
High Inflation, High Interest Rates,
Low Valuations -- What Does This Mean to India's Growth Prospects?, reveals that
the overall bleak scenario has compelled the Reserve Bank of India to lend at
higher interest rates, constraining market participants from raising
adequate funds.
If you are interested in a virtual brochure, which provides manufacturers,
end users, and other industry participants with an overview of India's growth
prospects amid high inflation as well as interest rates and low valuations, then
send an e-mail to Caroline Lewis/ Nimisha Iyer, Corporate Communications,
at caroline.lewis@frost.com/ niyer@frost.com , with your full name, company name,
title, telephone number, company e-mail address, company website, city,
state and country. Upon receipt of the above information, an overview will be
sent to you by e-mail.
Inflations and valuations in India are also influenced by the global
financial turbulence and the prices of crude oil.
"Since India imports most of its crude oil, the global prices of the
product will have a significant impact on the general price levels in the
country," say Frost & Sullivan Financial Analysts Ramakrishnan Sitaraman and
R. Madusudanan. "This state of affairs is expected to improve once the
domestic supply of crude oil increases."
Although inflation in itself is unthreatening, its intensification,
coupled with the government's inept handling of the situation, has dampened
corporate performance, and thereby, the overall economy.
The effects of the inflation explosion, however, have been a mixed bag for
the markets of agro-processing, automotive, banking and financial services,
capital goods, commercial aviation, consumer goods, healthcare and
pharmaceuticals, information technology, metals, oil and gas, organized
retail, power, real estate, and telecommunication. Among the markets to
benefit are agro-processing and organized retail.
"The agro-processing industry is expected to benefit because of the
increasing prices of food articles, while the organized retail industry could
gain from the reduction in consumers' disposable income and hence, falling
rentals," observes Ramakrishnan. "Most of the other industries in corporate
India are expected to be negatively affected in varying degrees."
In such trying circumstances, smaller participants that do not have the
resources to overcome the ongoing trends will be forced to sell out. They can
tide over this phase and emerge stronger by increasing their overall
efficiency levels.
"Companies that operate across the value chain and those that have better
agreements with stakeholders such as suppliers, distributors, and financiers
will remain insulated from inflationary pressures," notes Madusudanan. "New
product development will emerge as a key solution for increasing the staging
turnover levels."
Participants with robust forward and backward integration will be better
positioned to deal with the current trends. Additionally, those with
substantial assets in the balance sheet will be highly involved in merger and
acquisition activities, open offers, and share buy-backs.
High Inflation, High Interest Rates, Low Valuations -- What Does This Mean
to India's Growth Prospects? is part of the Financial Benchmarking in the Asset
Management Industry subscription, which also includes research services
in the following markets: North American life cycle funds: investment analysis
and Indian asset management industry: investment analysis. All research
services included in subscriptions provide detailed market opportunities and
industry trends that have been evaluated following extensive interviews with
market participants. Interviews with the press are available.
Frost & Sullivan's Business and Financial Services group serves clients
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offices on six continents. For more information about Frost & Sullivan's
High Inflation, High Interest Rates, Low Valuations - What Does This Mean to
India's Growth Prospects?
N49B
Contact:
Caroline Lewis
Corporate Communications - South Asia
P: +91.22.4001 3438
F: +91.22.2832 4713
E: caroline.lewis@frost.com
Tanu Chopra
Corporate Communications - Middle East
P: +91 22 4001 3437
F: +91 22 2832 4713
E: tanuc@frost.com
Nimisha Iyer
Corporate Communications - South Asia & Middle East
P: +91 22 4001 3404
F: +91 22 2832 4713
E: niyer@frost.com
SOURCE Frost & Sullivan
/CONTACT: Caroline Lewis, Corporate Communications - South Asia,
+91.22.4001 3438, fax, +91.22.2832 4713, caroline.lewis@frost.com, or Tanu
Chopra, Corporate Communications - Middle East, +91 22 4001 3437, fax,
+91 22 2832 4713, tanuc@frost.com, or Nimisha Iyer, Corporate Communications
- South Asia & Middle East, +91 22 4001 3404, fax, +91 22 2832 4713,
niyer@frost.com, all of Frost & Sullivan/
RN Photo Desk, photodesk@prnewswire.com/
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