"No eulogy is due to
him who simply does his duty and nothing more."
—St. Augustine (354-430)
Word for the day
Ludic (adj)
Playful in an aimless way: the ludic
behavior of kittens.
(Source: Dictionary.com)
Malice towards none
The courts in India are
deciding on matter which in usual course should be decided by RWAs,
Municipalities, and legislature.
What does it reflect?
First random thought this morning
Republic of India is mother of 36 children who live under the same
roof but each of them cooks in his own kitchen and runs his own shop. All
Indians who have lived in joint families and then separately under the same
roof, would understand what I am trying to say here.
The point worth pondering is why these 36 children are living
under the same roof along with their 69yr old mother. Is it out of love &
affection for each other? Is it out of fear of losing independence to some
outsider? Is it their weakness? Is it their strength? or is it something else?
4QFY16 may not be much different
In concluding part of my latest assessment of the trends in trade,
consumption and real estate, I would like to share the following observations
with the readers.
It is pertinent to note that the conditions are no different from
August 2015, when I surveyed the markets last time. So some of this might sound
repetitive to the regular readers.
(a) Most traders suggested
that the sales volume growth is definitely and substantially lower as compared
to past three years. Some relatively younger ones suggested that they have
never seen such sluggish demand conditions in their career.
(b) Almost everyone
complained about extremely tight liquidity conditions. The informal lending
market has shrunk substantially. Inventories have corrected in past six months,
but high carrying cost may prevent fresh inventory buildup in near term. Bank
credit is expensive and difficult to get.
(c) Most traders confessed
that the regulatory pressures have risen materially in past six months and
consequently the compliance levels are rising. This appears to be a structural
change that shall help once the economic cycle gathers pace.
(d) There is no sign of
pickup in demand for new houses. The investments made in residential real
estate has become totally illiquid. The sales agents for developers in NCR
region suggested that there is no perceptible change in inquiries post
announcement of pay commission.
(e) The packing material
volumes continue to be lower on year on year basis. Traders suggest that this
should translate in sluggish consumer demand growth in the current quarter
also.
(f) The Republic Day Sale
does not appear to be encouraging. Despite larger discounts and longer sales
periods, traders are disappointed. Couple of franchisees for large global
apparel brands suggested that the sales volumes this quarter could be lower
even after accounting for online sales.
(g) The rural demand
continues to be poor in all areas. Textile is impacted particularly.
(i) China is not a major
cause of worry for traders. The people who import regularly from China are in
fact comfortable with CNY depreciation and slower Chinese growth. This in their
view will lead to improvement in their margins. A couple of them indicated that
Chinese vendors might extend some credit to them, for the first time ever. So far,
they have been buying from China against all cash payment.
Small manufacturers are though a much worried lot.
Overall, the demand conditions remain challenging with little of
improvement in the near term.
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