Lacklustre festival season awaits India Inc

New Delhi: A lacklustre festival season is set to greet India Inc. this year. The impact of a widespread slowdown in the economy is starting to show in the balance sheets of Indian corporates.

To make matters worse, projections for the coming quarters give no indications about a pick-up in economic growth and sales.

From toothpaste makers to truck manufacturers, all are facing the pinch of the decline in private consumption. It is resulting in capacity reduction and job cuts.

Much of what has happened and what could be expected in the upcoming quarterly corporate earnings can be derived from the language of the company's comments on the state of the Indian economy and their performance.

This is bad news for companies, especially in the fast moving consumer goods (FMCG), consumer durables, electronics and automobile sectors, as a substantial portion of their annual sales come during the festival months of September and October, stretching on to November.

JSW Steel, in a statement, said: "Weaker automotive sales volumes and consumer durables sales in recent months is a matter of concern."

Dropping clear signals about the impact of slowdown, the company said: "Indian economic activities during the quarter were underpinned by a general lack of credit availability, resulting in muted business sentiments across various consuming sectors".

Describing the current market situation as "unprecedented", Tata Motors said "with the budget announcement and upcoming festive season, we expect some tail winds for the remaining FY20".

India's largest commercial vehicle maker, Tata Motors has nearly double its loss in the June quarter over the same period last year, saying that "domestic auto industry has declined sharply and significantly".

The country's largest passenger car maker Maruti Suzuki said that the demand environments is "uncertain".