Dun & Bradstreet India’s Composite CFO Optimism Index increased by 11.1% on a y-o-y basis during Q3 2023.
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 conditions and macro-economic conditions have improved significantly compared to the same period previous year.
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 businesses.
Key findings from the survey:
- The Composite CFO Optimism Index stands at 95.1, an 11.1% increase on a y-o-y basis.
- Optimism level for overall macroeconomic scenario increased by 26.7% (y-o-y) in the industrial sector.
- 14% of CFOs expect the cost of raising funds from the market to reduce, reflecting an improved optimism over five quarters.
- Optimism for the domestic macro-economic scenario has improved significantly to 72% in Q3 2023, which is the highest in 10 quarters.
- Optimism for the global macro-economic scenario stands at 37% in Q3 2023, which is the highest in 6 quarters.
- Only 27% of CFOs are optimistic about the risk appetite of firms in the current scenario, which is the lowest in 10 quarters.
Commenting on the findings of the survey, Dr. Arun Singh, Global Chief Economist, Dun & Bradstreet, said, “The increase in optimism for financial performance is being driven by the expectation of higher operating margins as the producer prices are steadily moderating along with improvement in supply chain. While high interest rates continue to cause discomfort amongst CFOs, the recently articulated dovish outlook by RBI offers some respite to CFOs regarding gradual decline in costs of raising investment and working capital as well as improved credit availability in the market. The decrease in global commodity prices and deflationary trends across markets globally contribute to heightened optimism towards domestic as well as global macroeconomic conditions, for the first time in five quarters”.
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 the 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.
About Dun & Bradstreet:
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