Optimism among chief financial officers (C-FOs) for July-September has improved against the previous quarter and going forward distribution of rainfall, raw material costs and revival in demand will be the key deciding factors, says a report.
The Dun & Bradstreet composite CFO optimism index for the third quarter of this year remained uncha-nged on a year-on-year basis but increased by 9.6 per cent on quarter-on-quarter basis.
“It appears the risks from the stressed assets in the banking system and the fluctuations in currency have been outweighed by positive performance in some indicators such as increase in bank credit, sales growth in automobile sector, increase in air passenger traffic, improvement in construction activity and buoyant capital markets,” said Manish Sin-ha, managing director (India), Dun & Bradstreet.
The survey reveals how optimistic CFOs are with respect to the overall financial health of their respective companies, the business risk environment and the mac-roeconomic scenario in the country. “The next quarter’s CFO optimism will depend a lot on monsoon, specifically the sufficiency and distribution of rainfall. This is in addition to the standard parameters like raw material costs and revival in demand,” Sinha said. Around 38 per cent of CFOs have stated risk management to be their priority, and close monitoring of strategic accounts is the most preferred risk management tool by CFOs. “CFOs have raised concerns on increase in cost of funding and availability of funds. The recent policy rate hike and pressure on government finances emanating from high crude oil prices could have weighed on the sentiment,” Sinha said.