RBI likely to hike repo rate by 25-35 bps: Economists

Economists expect the Reserve Bank of India (RBI)’ Monetary Policy Committee (MPC) to hike the repo rate by 25-35 basis points (bps) in its policy meeting this week. They also expect the MPC to lower its inflation forecast of 6.7 per cent for 2022-23. The MPC will meet on 3 August 2022 for three days to deliberate on the prevailing economic situation and announce its bi-monthly review on 5 August 2022. Barclays managing director & chief India economist Rahul Bajoria expects the MPC to vote unanimously for a 35 basis points hike in policy rate. He is of the view that under the inflation targeting framework, the RBI actions will likely remain guided by the consequences for growth and inflation. Bank of Baroda in its research report stated that conditions in India do not warrant an aggressive stance by the RBI. The bank expects the central bank to hike rates by only 25 bps in August 2022, followed by another 25 bps rate hikes in the next two meetings. Kotak Mahindra Bank chief economist Upasna Bhardwaj believes that rate hikes could be frontloaded in the current cycle. She expects the repo to rise to 5.75 per cent by end-2022 from 4.9 per cent at present. Factoring in peak inflation in the July-September 2022 quarter, DBS Group Research senior economist Radhika Rao expects a 35 bps hike in August 2022, followed by three 25 bps for the terminal rate to level off at six per cent by end March 2022.

References
1. https://www.financialexpress.com/economy/rbi-likely-to-hike-repo-rate-by-35-50-bps/2612671/
2. https://www.thehindubusinessline.com/economy/mpc-likely-to-go-in-for-smaller-quantum-of-rate-hike/article65706394.ece
3. https://economictimes.indiatimes.com/news/economy/policy/rbi-likely-to-raise-key-policy-rate-by-25-35-bps-to-check-inflation-say-experts/articleshow/93249809.cms
CMIE STATISTICS
Unemployment Rate (30-DAY MVG. AVG.)
Per cent
7.7 +0.7
Consumer Sentiments Index
Base September-December 2015
71.1 -0.5
Consumer Expectations Index
Base September-December 2015
69.7 -0.8
Current Economic Conditions Index
Base September-December 2015
73.3 0.0
Quarterly CapEx Aggregates
(Rs.trillion) Sep 21 Dec 21 Mar 22 Jun 22
New projects 3.39 3.94 7.78 4.23
Completed projects 1.28 2.76 1.26 1.07
Stalled projects 0.28 0.08 0.28 0.25
Revived projects 0.39 1.98 0.32 0.28
Implementation stalled projects 0.26 0.65 0.09 0.08
Updated on: 19 Aug 2022 8:28PM
Quarterly Financials of Listed Companies
(% change) Sep 21 Dec 21 Mar 22 Jun 22
All listed Companies
 Income 27.5 23.4 20.9 40.6
 Expenses 26.7 21.3 19.9 42.0
 Net profit 55.8 35.4 31.1 20.8
 PAT margin (%) 9.6 9.0 9.0 7.4
 Count of Cos. 4,696 4,742 4,615 4,494
Non-financial Companies
 Income 35.6 29.1 24.9 50.7
 Expenses 35.9 28.7 25.7 53.9
 Net profit 59.4 19.1 11.3 7.8
 PAT margin (%) 8.8 7.5 7.8 6.0
 Net fixed assets 4.9 2.1
 Current assets 10.9 15.2
 Current liabilities 0.8 11.7
 Borrowings 12.2 3.6
 Reserves & surplus 12.4 11.4
 Count of Cos. 3,384 3,428 3,347 3,282
Numbers are net of P&E
Updated on: 19 Aug 2022 8:28PM
Annual Financials of All Companies
(% change) FY20 FY21 FY22
All Companies
 Income 0.6 -1.0 23.3
 Expenses 0.4 -3.2 21.6
 Net profit -5.8 73.3 56.0
 PAT margin (%) 2.0 4.4 9.8
 Assets 9.0 9.9 10.4
 Net worth 4.8 11.7 13.2
 RONW (%) 3.4 6.8 13.8
 Count of Cos. 32,624 30,686 2,465
Non-financial Companies
 Income -1.1 -2.0 31.4
 Expenses -0.9 -4.1 30.9
 Net profit -22.0 64.3 53.5
 PAT margin (%) 2.2 4.0 8.9
 Net fixed assets 11.2 2.2 4.3
 Net worth 2.1 10.7 14.0
 RONW (%) 4.6 7.8 17.2
 Debt / Equity (times) 1.2 1.0 0.6
 Interest cover (times) 1.9 2.4 6.5
 Net working capital cycle (days) 82 86 51
 Count of Cos. 25,818 24,102 1,800
Numbers are net of P&E
Updated on: 12 Aug 2022 10:17AM