After the unlocking began, economic indicators have been showing signs of improvement. For instance, companies' profits grew 26% versus an estimated -2.1% decline. Operating profits also came in above expectations while operating margins also continued to expand.
Several economic indicators are showing a marked improvement from recent lows, which suggests the economy is getting back on track.
ET Wealth provides a snapshot of how key economic trends are shaping up post-Covid.
The increase in GST collections reflects the higher levels of economic activity being undertaken and business picking up with the easing of various restrictions.
NOTE: At Rs 5.59 lakh crore, total GST collection during April-October 2020 is still 20% lower than the Rs 7.01 lakh crore collected in the corresponding period of last year. Source: CARE Ratings
October witnessed an all-time high in eWay bill generation
Number of eWay bills (641 lakh) generated last month were the highest in a month since the start of the eWay bill system. E-way bills represent movement of goods from one place to another after requisite tax payment.
Source: Motilal Oswal Securities
Manufacturing index has climbed to its highest in a decade
Indian companies ramped up production at the strongest pace recorded since late-2007 as demand picked up.
Source: Motilal Oswal Securities
Automobile dispatches are at an all-time high
Auto sales (in terms of dealer dispatches) continued to improve in October 2020 as vehicle manufacturers hiked production in anticipation of strong sales during the ongoing festive season. Hyundai, Bajaj and Hero recorded highest ever sales in a month.
NOTE: Retail sales (in terms of actual purchases) of automobiles for the month remain more than 20% lower compared to the corresponding month last year.
Sharp uptick in enrolments at EPFO
Number of new EPF subscribers increased from 1.85 lakh in April to 6.70 lakh in August and exits from the subscriber base declined by more than 50%, from 5.71 lakh to 2.46 lakh during this period.
NOTE: EPFO payroll data points to recovery in job market, but figures are provisional and subject to change. Additions to payroll may not always reflect new jobs created, as some existing jobs get formalised with growth of smaller organisations. Besides, EPFO data completely ignores the informal sector. Source: EPFO
A healthy rise in exports coupled with easing of decline in imports saw the trade deficit fall since the turn of the year.
NOTE: Exports during April-October 2020-21 have registered a decline of 19% over the same period last year. After 6% uptick in September, exports declined by 5.4% in October. Source: Ministry of Commerce & Industry
A favourable balance of payments position—lower trade deficit and increased capital infl ows—have led to the build up in forex reserves in recent months.
India Inc beats earnings and margins estimates
Companies' profits grew 26% vs estimated -2.1% decline. Operating profits also came in above expectations while operating margins also continued to expand.
NOTE: Profitability and margins have expanded partly because of fall in input costs and reduction in wages and administrative expenses. Revenue growth remains largely subdued. Source: MOFSL | Above figures pertain to Motilal Oswal Securities coverage universe of stocks
Quite a few sectors under pressure as aviation, hospitality, auto, manufacturing, textile, real estate and retail
Johnson K8 days ago
Remember the pied Piper of Hamlin Some one is leading us into doomsday like the pied Piper. Six years have gone ache din still a non starter. But as the saying goes the path to hell is paved with gold. So the country is still hoping after hope, looking for all the green color, but sadly we are mistaking brown for green.
Yashodhan Muzumdar8 days ago
Evenbefore Covid Indian economy was shrinking. Still many activities are forbidden then how you expect the economy to shoot up. Many cities like Mumbai are facing rail and public transport. problems. 60% of restaurants are still closed.