Small business sentiment improved in the December quarter on positive factors like festivities, rupee depreciation, and dip in oil prices, claims a report.
Interestingly, the RBI, persuaded by the government, announced a special relief package of loan recast (up to Rs 25 crore) for micro, small and medium enterprises early January.
Banks also expect a minor improvement in asset quality from MSEs, the report said Friday, adding three of 10 lenders surveyed saw an improvement in the overall business situation of MSEs and half of them as satisfactory.
According to the Crisidex survey, undertaken by Crisil and the dedicated arm for small businesses financier Sidbi, said a special score moved up to 128 during the reporting quarter from 124 in the preceding quarter and 107 from the year-ago period.
"The change over the previous quarter was driven by an increase in order book size and employee base for MSEs and an increase in profit after tax margin and employee base for services MSEs," it said.
The survey says most small businesses expect the "feel good" factor to hold on to the next quarter as well. "Over half the respondents each from manufacturing and services expect the positive momentum to continue (in the March quarter)," Sidbi chairman and managing director Mohammad Mustafa said.
He said in the manufacturing space, pharma, gems & jewellery, and chemicals, while in services, professional services, traders, logistics and power and power utilities are the most optimistic.
Over 40 percent of those surveyed from both the manufacturing and services sectors spoke about December being a good quarter, it said.
While there were positives like dip in oil prices, festivities and rupee depreciation, the liquidity crisis faced by NBFCs, one of the largest financiers of this segment, was the biggest headwind.
From a job generation perspective, the report said 20 percent MSEs reported hiring in the reporting quarter, compared to 14 percent in the preceding quarter and a quarter of them want to hire in the March quarter, while 6 percent intended to reduce headcount.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)