Slowing demand a key concern for Indian cos - report

MUMBAI (Reuters) - Indian corporates see slowing demand growth as the primary long-term concern, while inflation is only a short term worry, according to findings of a survey of 86 Indian firms by brokerage Credit Suisse.

Weakening demand, followed by rising interest rates and a general slowdown in the economy ranked as top concerns, a shift from previous worries such as infrastructure bottlenecks, the brokerage said in a report.

"Typically, infrastructure bottlenecks and supply-related constraints have been the biggest problems for corporate India in the past few years, Credit Suisse said. "The current slowdown is largely from demand-related rather than supply-related factors."

Nearly 62 percent of the participants denied seeing any slowdown, which the brokerage said had to do with smaller companies being keen to project a strong business outlook to the investing community.

"Most of the denial of slowdown was from the smaller companies, while large companies were more comfortable speaking negatively about their current business environment," it said.

While inflation remained a key concern, Indian corporates expect an improvement in business environment after prices cool off, said Credit Suisse.

Key supply-side concerns included rising raw material costs and labour shortages, the survey, which was conducted in early September, showed.