The busy festival season failed to bring cheer to India’s largest companies in November, as business sentiment fell to the lowest level since February 2014, with companies also seeing little chance of a revival over the coming months.

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The MNI India Business Sentiment Indicator, a gauge of sentiment among BSE-listed companies, fell to 60.9 in November from 62.3 in October, to stand 11.6% down on the year. The fall in sentiment was observed across both manufacturing and construction companies, while sentiment among service sector companies rose for the first time in five months.

New Orders fell slightly between October and November, leaving orders down 11.1% on the year. Export Orders fared better, putting in a rise of 5.3% on the month, although were still 9.4% below the same level in November 2014. The Production indicator fell for the second consecutive month and was down 14.1% on the year.

There was little optimism that conditions would improve with weaker confidence in the current business environment also extending to future expectations. Companies were less optimistic about the next three months with the Expectations Indicator falling to 72.2 in November from 75.1 in October. Firms were significantly less bullish about Production, New Orders, Employment and the Availability of Credit over the next three months.

The only real positive came from an improvement in company’s balance sheets, with the decline in commodity prices and interest rate cuts pushing the Financial Position Indicator higher for the second month in a row. It now stands above its series average, although companies have been reeling under the pressure of high debt and low sales for most of 2015.

Commenting on the latest survey, Chief Economist of MNI Indicators Philip Uglow said, “Indian business confidence has been in trend decline for more than a year and the November survey shows few signs of an end in sight. Headline sentiment is the lowest for nearly two years while orders and output are both sharply down on the year.”

“Weak demand means that companies are unable to capitalise on the positives of lower input costs and looser monetary policy.”