Optimism level of India CFOs at its lowest level since Q4, 2020 – Dun & Bradstreet Survey

Dun & Bradstreet India Composite CFO Optimism Index decreased by 1.1% on a quarter-on-quarter basis and by 23.4% on a year-on-year basis during Q3 2022

Mumbai, September 12^th, 2022: A recent survey of Chief Financial Officers (CFOs) conducted by Dun & Bradstreet India, a leading global provider of business decisioning data and analytics, found that the confidence of CFOs in financial and macro-economic conditions has declined over the previous quarter. The pan-India survey compares the optimism levels of CFOs for Q3 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 the corporate sector overall. 

Key findings from the survey:

• The Composite CFO Optimism Index stood at 85.6 during Q3 2022 (lowest in eight quarters)
• Only 37% of CFOs are expecting an increase in the liquidity position of their companies (lowest in five quarters)
• 40% of CFOs are expecting an increase in the operating margin of their companies (lowest in eight quarters)
• Percentage of CFOs who expect the cost of raising funds from the market to decrease is the lowest since Q2 2019
• Only 29% of CFOs expect the global macro-economic scenario to be favourable during Q3 2022 (lowest since Q3 2020)
• 52% of CFOs expect the domestic macro-economic scenario to be favourable during Q3 2022 (lowest since Q1 2022)
• 43% of CFOs have stated that cash flow management will be their priority in the next six months

Commenting on the findings of the survey, Arun Singh, Global Chief Economist, Dun & Bradstreet, said “Global recession fears and domestic slowdown appear to have impacted the optimism level of CFOs, which fell to the lowest level in two years. As seen in the survey, the sentiment amongst the CFOs continued to fall for the fourth consecutive quarter. Though the Indian economy has remained resilient so far, downside risks to growth now remain skewed. Our survey also reflected that CFOs were initially optimistic about the revival of the Indian economy in Q1 2022; however, their optimism for domestic macroeconomic scenario has turned negative and continued to fall since the onset of the Russia Ukraine war. The optimism about operating margin and liquidity have also dropped sharply, having fallen for the 3rd quarter in a row as businesses face margin pressures from rising input and borrowing costs. Noticeably, the level of risk on the company’s balance sheet has increased, and the percentage of CFOs considering the same is the highest since Q3 2021. We expect the upcoming festive season in Q4 2022 to support the optimism level, unless the global slowdown intensifies and the spill-over effects strengthen, especially upon the export growth prospects”.