RBI likely to hike policy rates by 50-75 bps in remaining fiscal: Economists

Economists opine that a combination of normal monsoon and policy tightening by the Reserve Bank of India (RBI) will aid in cooling down inflation by the end of 2022. S&P Global Ratings economist Vishrut Rana pointed out that although there are some additional policy options for addressing broader price pressures such as reduced excise duties, lower value-added taxes or direct subsidies on agricultural produce, emphasis will be on monetary policy to control rising inflation. Rana is expecting 75 basis points (bps) rate increase this year. India Ratings & Research (Ind-Ra) principal economist Sunil Sinha believes that import duty cut and subsidy cut may help rein in inflation. However, he added that these have their own limits and cannot fully offset the impact of imported inflation which besides high prices also seeps into the economy via rupee depreciation. Ind-Ra expects another 50-75 bps hike in the reminder of 2022-23. Moody’s Analytics economist Shahana Mukherjee believes that inflation is more of a result of supply chain disruptions, both globally and domestically. Moody’s expects the benchmark repo rate to be increased by another 60 to 80 basis points in 2022.

References
1. https://www.financialexpress.com/economy/normal-monsoon-interest-rate-cut-key-to-bringing-down-inflation-by-year-end-say-economists/2565713/
2. https://www.business-standard.com/article/economy-policy/normal-monsoon-rate-cut-key-to-bring-down-inflation-by-yr-end-economists-122061900363_1.html
3. https://economictimes.indiatimes.com/news/economy/indicators/normal-monsoon-interest-rate-cut-key-to-bringing-down-inflation-by-year-end-say-economists/articleshow/92315439.cms
CMIE STATISTICS
Unemployment Rate (30-DAY MVG. AVG.)
Per cent
8.0 +1.3
Consumer Sentiments Index
Base September-December 2015
68.4 +0.8
Consumer Expectations Index
Base September-December 2015
67.6 +0.9
Current Economic Conditions Index
Base September-December 2015
69.7 +0.7
Quarterly CapEx Aggregates
(Rs.trillion) Jun 21 Sep 21 Dec 21 Mar 22
New projects 2.94 3.26 3.53 5.91
Completed projects 0.71 1.28 2.76 1.15
Stalled projects 0.33 0.28 0.06 0.30
Revived projects 1.14 0.39 2.07 0.28
Implementation stalled projects 0.64 0.26 0.65 0.07
Updated on: 25 Jun 2022 8:28PM
Quarterly Financials of Listed Companies
(% change) Jun 21 Sep 21 Dec 21 Mar 22
All listed Companies
 Income 42.3 27.5 23.4 21.6
 Expenses 41.8 26.7 21.3 20.5
 Net profit 140.6 55.3 35.4 32.8
 PAT margin (%) 8.9 9.6 9.0 9.1
 Count of Cos. 4,564 4,690 4,733 4,508
Non-financial Companies
 Income 61.1 35.7 29.1 25.9
 Expenses 62.4 36.0 28.8 26.6
 Net profit 195.2 59.5 19.0 12.9
 PAT margin (%) 8.4 8.8 7.5 7.9
 Net fixed assets 4.9 2.2
 Current assets 10.8 15.3
 Current liabilities 0.8 11.7
 Borrowings 12.1 3.7
 Reserves & surplus 12.4 11.5
 Count of Cos. 3,336 3,387 3,428 3,280
Numbers are net of P&E
Updated on: 25 Jun 2022 8:28PM
Annual Financials of All Companies
(% change) FY20 FY21 FY22
All Companies
 Income 0.6 -1.1 13.6
 Expenses 0.4 -3.4 10.5
 Net profit -4.4 72.2 58.0
 PAT margin (%) 2.0 4.5 10.9
 Assets 9.0 9.7 9.3
 Net worth 4.8 11.7 9.9
 RONW (%) 3.4 6.9 13.5
 Count of Cos. 32,455 29,998 539
Non-financial Companies
 Income -1.2 -2.3 26.3
 Expenses -1.0 -4.4 25.6
 Net profit -20.8 63.5 42.2
 PAT margin (%) 2.2 4.2 13.8
 Net fixed assets 11.2 2.0 -1.9
 Net worth 2.2 10.7 11.2
 RONW (%) 4.7 8.0 22.6
 Debt / Equity (times) 1.2 1.0 0.3
 Interest cover (times) 1.9 2.5 10.3
 Net working capital cycle (days) 81 85 16
 Count of Cos. 25,743 23,675 386
Numbers are net of P&E
Updated on: 20 Jun 2022 11:46AM