Dun & Bradstreet Composite CFO Optimism Index Q4-2020

Dun & Bradstreet Composite CFO Optimism Index declined by 8.4% (y-o-y) bringing the Index to a record low

Mumbai, December 28, 2020: A recent survey of Chief Financial Officers (CFOs) in India, conducted by business decisioning data and analytics firm Dun & Bradstreet, found that the confidence in financial and macro-economic conditions has declined. The pan-India survey compared confidence levels from Q4 2020 (Oct-Dec of the calendar year 2020) with the same quarter of the previous year. Based on the responses, the Dun & Bradstreet Composite CFO Optimism Index showed a decline of 8.4%, on a y-o-y basis to 98.1 during Q4 2020, bringing the Index to a record low.

Dun & Bradstreet 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.

The survey also revealed the following insight on the overall business climate in India:

• Optimism level for financial performance for companies and overall macroeconomic scenario declined by 8.2% (y-o-y) and 8.4% (y-o-y), respectively
• On sectoral level, optimism level declined by 6.2% (y-o-y) in the industrial sector and by 10.2% (y-o-y) in the services sector
• Optimism level for financial performance declined by 2.9% (y-o-y) in the industrial sector compared to a decline of 9.9% (y-o-y) in the services sector
• Only 18% of respondents expect an increase in the risk appetite in the current scenario - lowest since the index was instituted in Q2 2012
• About 39% of CFO surveyed expect a decrease in the cost of raising funds - highest in 14 quarters
• Only 20% of respondents in the services sector indicated the need for raising short-term funds. This is the lowest level for two successive quarters since the index was instituted in Q2 2012
•  About 39% of those surveyed in the industrial sector expect global macro-economic scenario to be favourable during Q4 2020, compared to 64% during Q4 2019
• Only 33% of CFO respondents expect the overall scenario for mergers & acquisitions to be favourable during Q4 2020, lowest since Q2 2014