Mumbai, July 19, 2004

Dun & Bradstreet India today released its Business Optimism Index (BOI) for India for the period Jul-Sep (Q3) 2004. The D&B Business Expectation Survey for Q3 2004 was conducted in June 04, amidst uncertainty ahead of the Union Budget. The Survey for Q3 2004 reveals that business confidence has increased marginally compared to the previous quarter.

The Composite Business Optimism Index for Q3 2004 rose marginally by 0.6% to 140.1 from 139.3 in the previous quarter. For Q3 2004, five out of six optimism indices, namely volume of sales, net profits, selling prices, inventory levels and employees, improved compared to the last quarter. The optimism index for new orders showed a marginal decline.

The corporate sector remains optimistic about future sales prospects. Approximately 84% of the survey's respondents expect sales volumes to increase in Jul-Sep 04 while nearly 11% expect a decline in sales. The resultant Optimism Index for Sales Volumes stands at 73%, as compared to 72% in the previous quarter. The capital goods sector was the least optimistic on this parameter.

The Optimism Index for Net Profits stands at approximately 69%, which is a small gain with respect to the previous quarter. While 82% of the survey respondents expect their net profits to go up in the forthcoming quarter, 13% expect profits to fall. 

Nearly 30% of the survey respondents expect the selling price of their product to go up during Jul-Sep 04. While nearly 58% of the respondents anticipate no change in the selling price, 12% of the respondents expect prices to decline. The resultant Optimism Index for Selling Prices stands at 18%, which is a rise of 2 percentage points over the previous quarter.
80% of the respondents expect their order book position to improve (the same as in the previous quarter), while 7% expect a decrease in new orders. The resultant Optimism Index for New Orders stands at 73%, which is 1 percentage point less than the previous quarter's figure. The basic goods sector was the most optimistic about receiving new orders, followed by the services sector.

38% of respondents expect their level of stocks to increase while 18% expect their stocks to decline in Jul-Sep 04. The resultant Optimism Index for Inventory thus stands at 20% as compared to 15% for the previous quarter. 35% of the respondents intend to increase the number of their employees as compared to 38% in the previous quarter. The number of respondents expecting a decline in the number of employees has decreased to 8% for the Jul-Sep 04 quarter. The resultant Optimism Index for Employees has risen to 27% for Q3 2004 compared to 25% in the previous quarter.

"After the initial political uncertainty, the formation of the new Government has helped consolidate business confidence", said Mr Rajesh Mirchandani, Chief Executive Officer, Dun and Bradstreet- South Asia & Middle East. "The implementation of Budget policies and monsoon performance would be key factors in determining business confidence in the next quarter".


About the D&B Optimism Index

The D&B Optimism Index is widely recognised as an indicator, which measures the pulse of the business community and serves as a reliable benchmark for investors. The index is arrived at on the basis of a quarterly survey of business expectations.

The survey is conducted on a sample of companies that are selected randomly from D&B's commercial credit file. The sample selected is a microcosmic representation of the country's business community and includes companies from several sectors including basic goods, capital goods, intermediate goods, consumer durables, consumer non-durables and service sectors. Respondents to the survey are asked six standard questions regarding whether specified parameters viz., net sales, net profits, selling prices, new orders, inventories and employee levels, will register an increase, decline or show no change in the ensuing quarter as compared to the corresponding quarter of the previous year. The indexes are then calculated by subtracting the percentage of respondents expecting decreases from those expecting increases.

For calculating the Composite Business Optimism Index, each of the six parameters is assigned a weight. The positive responses for every parameter for the period under review are expressed as a proportion of positive responses in the base period (Q2 1999). The parameter weights are then applied to these ratios and the results aggregated to arrive at the Composite Business Optimism Index.

Dun & Bradstreet (NYSE:DNB), the world's leading provider of business information, has been enabling business-to-business commerce for nearly 160 years. D&B's information and technology solutions help businesses reduce credit risk, find profitable customers, manage vendors efficiently and collect cash and receivables. Businesses also use D&B's information and technology to authenticate and verify potential trading partners online, increasing their trust and confidence in e-commerce transactions. That's why so many companies-including over 90 percent of the Business Week Global 1000 - rely on D&B as the most trusted source for information they need to make their business a success. For more information, please visit www.dnb.com.

Download D&B Q3 2004 Optimism Index for India