MPC members expect more rate hikes in future

With a view to tackle inflation, the members of the monetary policy committee (MPC) of the Reserve Bank of India (RBI) have hinted on more interest rate hikes in the coming months, showed the minutes of the June 2022 policy review. The MPC hiked the policy repo rate by 90 basis points (bps) in May and June to 4.9 per cent. MPC member Michael Patra suggested to watch the direction of inflation, not its level. According to him, inflation should reach the four per cent target in 2023-24 after moderating to six per cent by the fourth quarter of 2022-23. Rajiv Ranjan, executive director of the RBI, said that given inflation expectations in India are largely adaptive or backward looking, persistent supply disruptions and the resulting price pressures could get entrenched in higher inflation expectations. According to another MPC member Ashima Goyal, at the current stage of recovery, the one-year ahead real rate must not be more negative than minus one per cent. A fifty or sixty basis point hike would help achieve this, she added. External member Prof Jayanth R Verma opined that more needs to be done in the MPC’s future meetings to bring the real policy rate to a modestly positive level consistent with the emerging inflation and growth dynamics.

References
1. https://www.business-standard.com/article/economy-policy/mpc-members-indicate-more-rate-hikes-to-tackle-rising-inflation-122062300025_1.html
2. https://economictimes.indiatimes.com/news/economy/policy/mpc-raised-rates-to-prevent-inflation-from-corroding-economic-recovery-minutes/articleshow/92391946.cms
3. https://www.financialexpress.com/economy/inflation-should-fall-to-4-in-fy24-rbi-deputy-governor-michael-patra/2569575/
4. https://www.financialexpress.com/economy/rbi-guv-flags-continued-high-inflation-as-a-major-concern-mpc-minutes/2569504/ RBI aim is to not have over-tightening or over-stimulus: MPC's Ashima Goyal
CMIE STATISTICS
Unemployment Rate (30-DAY MVG. AVG.)
Per cent
7.4 +0.5
Consumer Sentiments Index
Base September-December 2015
73.4 +0.2
Consumer Expectations Index
Base September-December 2015
72.0 0.0
Current Economic Conditions Index
Base September-December 2015
75.6 +0.6
Quarterly CapEx Aggregates
(Rs.trillion) Sep 21 Dec 21 Mar 22 Jun 22
New projects 3.34 3.91 7.76 3.79
Completed projects 1.28 2.76 1.25 1.05
Stalled projects 0.28 0.08 0.28 0.25
Revived projects 0.39 1.98 0.28 0.28
Implementation stalled projects 0.26 0.65 0.09 0.08
Updated on: 08 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 39.6
 Expenses 26.7 21.3 19.8 42.5
 Net profit 55.8 35.4 32.1 9.4
 PAT margin (%) 9.6 9.0 9.1 7.1
 Count of Cos. 4,695 4,739 4,575 1,430
Non-financial Companies
 Income 35.6 29.1 24.9 51.9
 Expenses 35.9 28.7 25.6 57.5
 Net profit 59.4 19.1 12.5 -9.5
 PAT margin (%) 8.8 7.5 7.9 5.4
 Net fixed assets 4.9 2.2
 Current assets 10.9 15.2
 Current liabilities 0.8 11.7
 Borrowings 12.2 3.6
 Reserves & surplus 12.4 11.5
 Count of Cos. 3,382 3,424 3,317 1,041
Numbers are net of P&E
Updated on: 08 Aug 2022 8:28PM
Annual Financials of All Companies
(% change) FY20 FY21 FY22
All Companies
 Income 0.6 -0.9 18.9
 Expenses 0.4 -3.2 16.4
 Net profit -5.8 73.4 62.3
 PAT margin (%) 2.0 4.4 10.9
 Assets 9.0 9.9 10.1
 Net worth 4.8 11.7 12.6
 RONW (%) 3.4 6.9 13.4
 Count of Cos. 32,607 30,609 2,075
Non-financial Companies
 Income -1.1 -2.0 27.5
 Expenses -0.9 -4.0 26.3
 Net profit -22.1 64.4 58.8
 PAT margin (%) 2.2 4.1 11.0
 Net fixed assets 11.2 2.2 3.3
 Net worth 2.1 10.7 13.1
 RONW (%) 4.6 7.8 17.5
 Debt / Equity (times) 1.2 1.0 0.5
 Interest cover (times) 1.9 2.4 6.9
 Net working capital cycle (days) 82 86 44
 Count of Cos. 25,804 24,027 1,526
Numbers are net of P&E
Updated on: 05 Aug 2022 10:42AM