‘Indian cos’ performance worsened faster in Q4’ | Economic Times

Mumbai: Business performance at Indian firms deteriorated faster in the March quarter than the preceding three-month period, an analysis of tax filings, provident funds (PF) and credit ratings of thousands of entities by analytics company Rubix Technologies showed.As per the report, the GST compliance score of 2,292 business entities of the 10,193 companies being monitored deteriorated. In the quarter before, only 8 per cent of business entities had witnessed a drop in this indicator.Similarly, the PF report prepared filings of 2,926 businesses. It showed that 29 per cent of the business entities being monitored reported reduced filings whereas only 13 per cent of the business entities witnessed a drop the previous quarter.An analysis of external credit ratings such as those prepared by ICRA, Credit Suisse and India Ratings of the 894 business entities showed 7 per cent of the entities reported deterioration, compared with only 2 per cent in the prior quarter.There could be several reasons for non-compliance with statutory requirements for paying GST and PF and filing returns.“Of these, cash flow delays or liquidity problems that business entities face are probably the most important drivers for non-compliance…A deterioration in any of the above parameters for the business entities should raise red flags and serve as early warning signals for those monitoring the portfolio,” Rubix said.Kaushal Sampat, founder of Rubix Data Sciences, said the deteriorating business risk environment in India could be due to the second wave of the pandemic.“We forecast that Q1 FY 2022 will be very challenging as various states have imposed lockdown-type restrictions which will adversely impact the financial performance, stability and compliance of businesses,” he added.