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Dun & Bradstreet India Composite CFO Optimism Index showed a decrease of around 12% on a quarter-on-quarter basis to 91.9 during Q2 2022.
Mumbai, June 15, 2022: A recent survey of Chief Financial Officers (CFOs) in India, conducted by Dun & Bradstreet India, a leading global provider of business decisioning data and analytics, found that CFOs confidence in financial and macro-economic conditions has declined over the previous quarter. The pan-India survey compared the confidence levels of CFOs for Q2 2022 with the previous quarter.
The Dun & Bradstreet India Composite CFO Optimism Index analyses the optimism level of CFOs on 12 parameters: operating margin, liquidity position, level of financial risk on company’s balance sheet, risk appetite, need for raising short-term and long-term funds, cost of raising funds, availability of funds, domestic and global macroeconomic scenario, overall scenario for mergers and acquisitions, and level of financial risks for corporate sector as a whole.
Key findings from the survey were:
Dun & Bradstreet Composite CFO Optimism Index stood at 91.9, a decrease of around 12.0% (q-o-q) in Q2 2022
Commenting on the findings of the survey, Arun Singh, Global Chief Economist, Dun & Bradstreet, said: “Optimism levels amongst CFOs remain clouded because of heightened concerns over economic recovery, geo-political risks, rising input cost pressures and the faster than expected rise in borrowing costs. The percentage of CFOs who are optimistic has fallen for all the parameters within ‘financial performance’ and ‘macro-economic scenario’ from the previous quarter, except for need for long term funds and operating margin.”
“The spillover effects of aggravated geopolitical risks, protracted supply chain disruptions and protectionist policies have intensified the financial risks for firms, as seen in the survey. Only 10% of CFOs expect the level of financial risks for the overall corporate sector to decrease, the lowest percentage since Q3 2018. We expect the uncertainty over the global economic revival and spillover effects of monetary policy tightening to weigh on business sentiment in the next quarter”, added Singh.
About the Dun & Bradstreet India Composite CFO Optimism Index
The Dun & Bradstreet India Composite CFO Optimism Index, which has been tracking the changing sentiment of CFOs since 2012, is a leading indicator of the Indian financial market as it helps in predicting the performance of Sensex three months in advance.
A sample of companies belonging to basic goods, capital goods, intermediate goods, consumer durables, consumer non-durables and the services sector is selected randomly from Dun & Bradstreet’s commercial credit information file. The sample selected is representative of India’s business community. All the respondents in the survey are asked a set of questions regarding the financial performance of their companies and the overall macroeconomic scenario for the corporate sector in the forthcoming quarter. The CFOs are asked to state their expectations as to whether the specified parameters pertaining to their respective companies and the overall macroeconomic scenario will register an increase, decrease or show no change in the ensuing quarter as compared to the same quarter in the previous year. Two broad indices, optimism at the company level and optimism at the macroeconomic level, each consisting of eight and four sub-parameters respectively, are then designed.
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