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Klynveld Peat Marwick Goerdeler (KPMG), one of the leading providers of financial assistance, carried out two surveys in order to explore the key challenges that CEOs of Indian companies are facing amidst the pandemic.
The first survey was conducted in January, and the second in August this year.
Key findings
The survey report — Covid-19 Special Edition — found that the agenda of leaders has shifted radically since the beginning of the year. This is due to the incorporation of new work realities triggered by the pandemic.
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62 per cent of CEOs altered their own compensation, as part of the broader objective of cost optimisation and cost management to sail through the pandemic.
Only 33 per cent of CEOs in India are confident of the growth in their domestic economy, while only 42 per cent are optimistic about growth prospects. This stood at 78 per cent and 84 per cent at the beginning of the year, respectively.
This weakened view on the growth prospects is in line with that of CEOs globally. CEOs in India are also less confident of their companies’ earnings, the survey report added.
About 19 per cent of CEOs in India expect the earnings of their companies to either remain flat or decline. 37 per cent of CEOs in India have re-evaluated their purpose in order to adjust to the changes in the market, the report further noted.
CEOs in India also view supply chain risk as a major threat. The number of CEOs highlighting this as a critical risk rose five-fold since the onset of the pandemic.
89 per cent CEOs in India would continue to build on the use of digital collaboration and communication tools.
With remote working becoming the norm, 77 per cent of Indian CEOs believe they have access to wider talent pools and 48 per cent will consider downsizing their office spaces.
Commenting on the findings, Arun M Kumar, Chairman, and CEO, KPMG in India, said in an official statement: “The significant shift in CEOs’ priorities that we have witnessed over the last six months reflect the agility with which CEOs had to deal with the challenges of the pandemic.”
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He added: “Looking forward, similar to their global counterparts, CEOs in India are less confident about global and domestic economic growth than they were at the onset of the year. Their earnings outlook is clearly challenged.”
Vikram Hosangady, Partner and Head, Clients and Markets, KPMG in India, said in a statement: “If anything, Covid-19 has only acted as a catalyst to accelerate digital transformation with companies today spending more than what they originally planned for on digitisation in spite of uncertainty in earnings.”
“Companies will resort to zero-based budgeting on all discretionary spending for the next two-three years and question the very need for some of these spending. This is likely to make them leaner, meaner, and significantly more profitable when growth returns,” he added.
Hosangady believes that the importance of liquidity and the need to be moderately leveraged are also key learnings from this pandemic, something that companies should look at etching in their business plans for the future.
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