New Delhi: India's sluggish growth momentum has dampened demand, capital expenditure and export outlook of companies, and the future recovery cycle will be "elongated and below market expectations", says a survey.

According to the UBS India financial conditions index, growth may have reached a trough in the June 2019 quarter.

In economic parlance, a trough is a low turning point of a business cycle.

India's economic growth has slumped for the fifth straight quarter to an over six-year low of 5 per cent in the three months ended June as consumer demand and private investment slowed amid deteriorating global environment.

The UBS Evidence Lab survey of 267 C-suite executives (including CEOs and CFOs) in July 2019, to gauge the views of broader India Inc, noted that nearly half of the executives expect only modest demand momentum of up to 10 per cent over the next 12 months.

Moreover, the share of respondents expecting double-digit growth in overall demand for the sector has come down from more than 40 per cent last year to only one-third now.

Nearly 48 per cent of the surveyed firms expect capital expenditure requirements either to remain broadly the same or increase modestly, less than 5 per cent, over the next 12 months.

Similarly, nearly a third of firms expect export demand to pick up rather modestly, at 5-10 per cent, and 22 per cent expect export growth to be less than 5 per cent.

"Our base case is that recent policy responses and possibly more ahead should help arrest the negative feedback loop. The UBS India financial conditions index suggests that growth likely troughed in the June 2019 quarter, but we think the recovery cycle will be elongated and below market expectations," Tanvee Gupta Jain, Economist, UBS Securities India and Gautam Chhaochharia, Analyst, UBS Securities India noted in the report.

With a view to boost credit to help revive the economy, the government on Friday had announced its second of the three-part stimulus, merging 10 public sector banks into four.

A week prior to this announcement, the first stimulus package was unveiled that included reduction of taxes, improvement of liquidity in the banking sector (formal and shadow), increased government spending on auto and infrastructure, and accelerated refunds of Goods and Services Tax.

This was followed by liberalisation of foreign investment rules in four sectors -- coal mining, contract manufacturing, single-brand retail and digital media.

A third and possibly last package, expected in the next few days, may deal with issues facing the realty sector.