INDIA, INC. VS ITS U.S. PEERS

A country’s stock market and the performance of the respective blue chip companies is often seen as the barometer of its economic health, and a gauge of investment sentiment. On that parameter, the Indian companies have outclassed its U.S. peers by a wide margin for the first time.

The total 30 companies on the Sensex, the benchmark index of the Bombay Stock Exchange of India, have shown average growth in net sales at 7.75% and a dip in net profit of 13.20% in the third quarter of the current financial year. This is in sharp contrast to the U.S. Standard & Poor’s 500 companies’ profits declining by about 35% on an average, during October-December 2008. This is the sixth consecutive quarter when the profits of the U.S. companies declined, compared to the first quarterly fall in the aggregate profits for the Sensex companies in the recent years.

The robust performance by Indian companies could help explain the optimistic outlook of the Government that estimates Foreign Direct Investments (FDI) for next financial year to reach $40 billion, twice the amount received during the first half of the current financial year.