Optimism on Financial Performance Declines; Industrial Sector witnesses largest drop since Q3 2023

PRNewswire
Mumbai (Maharashtra) [India], March 17: 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 for both industrial and services financial performance has reduced compared to Q4 2024.
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 macro-economic scenario, overall scenario for mergers and acquisitions, and level of financial risks for businesses.
Overall optimism for financial performance reduced marginally by 0.8% in Q1 2025. Optimism on the financial sub-index for the industrial sector has declined by 7.1% Q-o-Q.
There is a decline in the macro-economic sub-index for the services sector in Q1 2025, due to uncertainty about the global recovery. Optimism in the industrial sector for the global macro-economic scenario declined by 9% Q-o-Q due to uncertainty on the global policy front - specifically on trade.
Overall, businesses are expected to benefit domestically from the anticipated rate-cuts and are therefore delaying their requirements for long-term funds for the moment, indicated by a decline in optimism for the need for long term funds. Optimism for company liquidity positions has reduced in Q1 2025, whilst optimism for the need for short-term funds increased in Q1 2025.
Key findings from the survey:
* The Composite CFO Optimism Index is at 134.3 for Q1 2025
* Overall optimism for financial performance has decreased by 0.8% in Q1 2025
* Optimism for overall macro-economic scenario stands at 168.7 in Q1 2025, increasing by 35.8% on quarterly basis
* Optimism within Industrial sector for financial performance sub-index declined by 7.1% in 2025
* Optimism on the Global macro-economic scenario for the corporate sector reduced by 6% Q-o-Q
* Optimism regarding the risk appetite in the current scenario in the services sector reduced by 38% Q-o-Q
* Optimism for company operating margins has reduced by 8% Q-o-Q
Commenting on the findings of the survey, Dr. Arun Singh, Global Chief Economist, Dun & Bradstreet, said, "The Q1 2025 Composite CFO Optimism Index shows a stable yet cautious outlook. While overall financial optimism slightly dropped by 0.8%, shifts across sectors and economic scenarios are evident. Concerns over US trade policies and global protectionism have dampened global macro-economic optimism. The services sector shows reduced risk appetite, and operating margin optimism has decreased by 8% Q-o-Q, reflecting pressure on profitability. In short, while the macro-economic outlook remains positive, CFOs are adopting a more cautious approach to growth and risk management."
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:
Dun & Bradstreet, a leading global provider of business decisioning data and analytics, enables companies around the world to improve their business performance. Dun & Bradstreet's Data Cloud fuels solutions and delivers insights that empower customers to accelerate revenue, lower cost, mitigate risk and transform their businesses. Since 1841, companies of every size have relied on Dun & Bradstreet to help them manage risk and reveal opportunity. For more information on Dun & Bradstreet, please visit www.dnb.com.
Dun & Bradstreet Information Services India Private Limited is headquartered in Mumbai and provides clients with data-driven products and technology-driven platforms to help them take faster and more accurate decisions across finance, risk, compliance, information technology and marketing. Working towards Government of India's vision of creating an Atmanirbhar Bharat (Self-Reliant India) by supporting the Make in India initiative, Dun & Bradstreet India has a special focus on helping entrepreneurs enhance their visibility, increase their credibility, expand access to global markets, and identify potential customers & suppliers, while managing risk and opportunity.
India is also the home to Dun & Bradstreet Technology & Corporate Services LLP, which is the Global Capabilities Center (GCC) of Dun & Bradstreet supporting global technology delivery using cutting-edge technology. Located at Hyderabad, the GCC has a highly-skilled workforce of over 500 employees, and focuses on enhanced productivity, economies of scale, consistent delivery processes and lower operating expenses.
Visit www.dnb.co.in for more information.
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