Recession: Is it over?

We have been seeing Indian market going up and down over last few days. I thought I will pen (type) down some of my thoughts on Recession with respect to the market data from India perspective. Q2 saw some good results across various sectors except for may be telecom. Here are my views on the trend:

- The toplines of most of the companies have not grown much. Infact IT companies have ensured that they sustain their margin and increase profitability. Across sectors we saw very low growth in revenue (exceptions could be in Banks)

- Reason for profitability for the companies: Low interest cost, lay-offs (made their team lean), tight on internal spending, cautious in marketing spend, raw material costs have come down drastically over last few months.

- Caution: Commodity prices are rising and there is a high probability that 2 quarters down the line we might see some pressure in the income statements of most of the companies. Export oriented companies are having a good time because of the dollar fluctuations. As the crude oil price raise along with other commodities, companies will have to start looking at aggressively improving their topline. We will see some good spend on marketing and sales from now on in most of the sectors.

- Special attn to telecom: A dirty price war is going on Telecom sector. I think this has left consumers in a confused state (well said by my friend Divakar)

- Auto is showing up good sales data. The growth is amazing. As Hindu rightly pointed out- Its the victory for the consumers.

Hope 2010 will change and India will have moments to celebrate. Overall, the market is improving, companies have adapted to new situation and we will see better results in the months to come.