The Dun & Bradstreet Business Optimism indices for India from October to December 2004 has touched an all-time high on three counts of volume of sales, net profits and new orders.

The index as a whole rose 4.5 per cent to touch 132.2 points from 126.5 in the previous quarter, reflecting a significant rise in business confidence.

"The Business Expectation Survey for Q4 2003 was conducted in September 2003. By then, the satisfactory performance of monsoon 2003 was well recognised and the stock markets were moving upwards amidst a flood of positive economic news," a Dun & Bradstreet release said.

The index for inventory levels also increased, but the index for selling prices remained stagnant and for employees witnessed a decline.

"Acceleration of business confidence is a reflection of positive developments in various quarters of the economy", said Rajesh Mirchandani, vice-president and managing director, Dun & Bradstreet-South Asia.

"Healthy economic indicators and corporate results should continue to support the positive outlook in coming months."

Demand conditions are expected to be strong in Q4 2003 with 83 per cent of respondents expecting an increase in volume of sales.

While 11 per cent of respondents expect sales to remain stagnant in the coming quarter, only 6 per cent anticipate a decline in sales.

The optimism index for net sales stands at 77 per cent, its highest level since the inception of BOI in India.

Respondents from the consumer non-durables segment are most optimistic about the sales performance in the next quarter.

The outlook for intermediate goods and consumer durables segments also augurs well, according to the survey.

The bullish outlook on  topline growth has been retained for bottomline growth too. Around 83 per cent of the respondents expect their net profit level to go up in the coming quarter. Only 6 per cent expect a decline in net profit.

The optimism index for net profits stands at 77 per cent, which is again the highest level since the inception of the index.

Companies in consumer non-durables, intermediate goods and consumer durables segments are more optimistic about net profit in the coming quarter.

The index for new orders has touched its highest level of 81 per cent for Q4 2003, reinforcing the respondents' optimism about demand conditions.

Though the outlook on profitability is positive, the respondents are not quite optimistic about selling prices.

The Optimism Index for Selling Prices for Q4 2003 stands at 10 per cent, same as in the previous round. The services sector is relatively more bullish on its pricing power in the coming quarter.

The Optimism Index for Inventory Levels has increased sharply to 23 per cent for Q4 2003 from 9 per cent in the previous quarter.

While 32 per cent respondents expect higher inventory in the coming quarter, 9 per cent expect a lower inventory (compared to 24 per cent in the previous round).

The capital goods and basic goods segments are the most optimistic on this parameter. The Optimism Index for Employees declined to 19 per cent for Q4 2003 from 26 per cent in the previous round.

It was the first decline in the index after four consecutive gains. The consumer non-durables segment is the most optimistic on this parameter, followed by the services sector.