Dun & Bradstreet Composite CFO Optimism Index at a 7 quarter high: D&B India’s CFO survey

Dun & Bradstreet, the world’s leading provider of global business information, knowledge and insight conducted a pan India survey of corporate CFOs in which they were asked about their confidence in the overall financial and macro-economic conditions for Q4 2016 (Oct-Dec of the calendar year 2016), as compared to the same quarter of the previous year. The survey reveals how optimistic the CFOs are with respect to the overall financial health of their respective companies, the business risk environment and the macroeconomic scenario in the country. The survey also tried to capture the CFO’s viewpoint regarding adoption of technologies.

The survey revealed interesting facts about CFOs’ perspective on the overall Business Climate:

1. Dun & Bradstreet Composite Optimism index at a 7- quarter high
2. CFOs in the services sector continued to remain more optimistic than the industrial sector for Q4 2016 – the second quarter in a row
3. While optimism level of CFOs in the services sector declined for the macroeconomic condition, CFOs in the industrial sector remained optimistic for both the for both financial condition and the macroeconomic scenario
4. Optimism level on the financial performance of the company which had fallen in Q3 2016 for the CFOs in the industrial sector, turned positive in Q4 2016, while it continued to remain positive for the CFOs in the services sector
5. More than 3/4th of the CFOs expect level of financial risks on company's balance sheet to decrease or remain unchanged in Q4 2016 as compared to last year
6. Around 54% expect cost of raising funds from the market to decrease for Q4 2016 - highest since Q2 2012
7. Effective recovery system (88%) followed by increase in close monitoring of strategic accounts (86%) emerged as the most preferred risk management tools during the next six months
8. Around 87% of CFOs in the services sector consider risk management to be their priority for the next six months as compared to 71% of CFOs in the industrial sector
9. Around 90% of the CFOs in the services sector stated increase in close monitoring of strategic accounts during the next six months as against 81% of the CFOs in the industrial sector

Commenting on the findings of the survey, Arvind Raghav, Director, Dun & Bradstreet India stated that “The optimism amongst the CFOs for Q4 2016 stands at a 7 quarter high. Amidst moderating inflation and expectations of improving economic growth, the CFOs remain optimistic about the operating margin of their companies in Q4 2016. The continuance in the optimism level amongst the CFOs about the improvement in the liquidity position of the company coupled with the expectation of decline in cost of raising funds indicate that going ahead CFOs will be in more comfortable situation to manage their funds. The uncertainty over the strengthening of the global economic growth has, however, dented the optimism of the CFOs in the services sector. The expectation over the Fed rate hike and the impact of demonetisation on the domestic economy which has constrained cash transaction in turn impacting the consumption demand in the near term, will be two broad factors which will have a major influence on the way business sentiment shapes up going ahead”.