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Chief Financial Officers (CFOs) in India were optimistic about the current state of the domestic economy and ranked it 6.1 out of 10 in a survey.
Indian CFOs felt that the greater threats to India were inflation, oil prices and the economic slowdown rather than the global economic factors, according to a survey conducted by Bank of America Merrill Lynch.
The survey was conducted between October and December last year. This report — which is the first CFO Asia outlook survey — has taken responses from 465 CFOs across seven countries — Australia, China, India, Hong Kong, Japan, Korea and Singapore. Responses from 100 Indian CFOs were taken in the survey.
To gauge the market outlook, BofA-ML will conduct a pulse survey during mid-2012 before they release their 2013 report.
CFOs in Asia believe that 2012 will buffer them from economic threats in Europe and the US. As compared with the other countries in Asia, India is more inward looking and, therefore, more insulated from negative global trends, said the survey.
58 per cent of the CFOs in Asia forecast revenue to increase at their companies in 2012. Nearly 77 per cent Indian CFOs felt that revenues would increase during the year. The survey also pointed out that Indian CFOs were putting more emphasis on gaining market share rather than profit growth. 2012 is also likely to see a continued expansion of trade within Asia, the survey said.
The majority of the CFOs did not expect their borrowing needs to increase in 2012. Indian CFOs may require financing for both domestic and international expansion as well as for capital expenditure. They were also second most likely to need financing for acquisitions and working capital, according to the survey.
Most CFOs were of the opinion that they were looking for acquisitions in their home nation. Around 34 per cent of the CFOs surveyed expect to participate in a merger or acquisition in 2012. The most cited reason for planned M&A was to ensure growth followed by industry consolidation.
priya.s@thehindu.co.in
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