CFOs’ optimism at 18-month low

New Delhi, Sept. 20: Optimism level among chief financial officers (CFOs) during July-September touched a 18month low amid concerns related to subdued demand and strain on corporate balancesheet, according to a survey.

The Composite CFO Optimism Index for the September quarter of this year declined by 11 per cent year-on-year and by 5.7 per cent on a quarter-on-quarter basis.

Optimism among the CFOs deteriorated more for the financial performance of their companies compared to macroeconomic conditions.

According to the survey, only 41 per cent of the CFOs expressed optimism about liquidity position of their companies — the lowest since Q2 (April-June) 2014.

“Concerns related to subdued domestic and weak external demand, strain in the corporate balancesheet, stressed assets in the banking system and the pressure on public finances appear to have contributed to the lower optimism level,” said Manish Sinha, MD India, Dun and Bradstreet.

Further, strain on the corporate balancesheet has added to the already weak risk appetite of the CFOs. Consequently, their expansion plans remain muted, which also has an impact on the optimism score.

Mr Sinha further noted that looking forward, “remonetisation measures, restocking post GST implementation, the onset of the festive season, state pay commission hikes and the lower lending rates might result in some tailwinds for the CFO Optimism scores”.

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.