Chief financial officers (CFO) of leading companies believe the country's financial and macroeconomic conditions are likely to remain subdued in the third quarter of the current fiscal, says a survey.
"Optimism regarding overall macro-economic conditions continue to decline significantly by around 32 per cent in the December quarter compared to a decline of around 24 per cent in the same period last year," said Dun & Bradstreet said in a survey of CFOs. The survey does not specify to what level has been but only the percentage level of the decline.
According to the survey, the optimism index for the period stands at a seven-quarter low, which is an all time low since the index was constructed.
"The optimism index declined by 26.3 per cent on a y-o-y basis and by 12.9 per cent on a q-o-q basis," the survey said.
"CFOs remain highly cautious regarding the overall macroeconomic conditions both domestically and globally with the optimism level falling more sharply among the CFOs in the industrial sector," said Arvind Raghav, director for risk management solutions at Dun & Bradstreet India.
Optimism amongst the CFOs surveyed in the industrial sector has fallen more sharply by around 30 per cent than the CFOs in the services sector whose optimism level dropped by around 25 per cent.
The CFOs, who were quite optimistic about their respective companies' financial performance during the September quarter, say their optimisim level for the Q3 has fallen, the survey revealed.
Around 85 per cent of the surveyed CFOs expect the cost of raising funds to increase or remain same during Q3 compared to the same quarter of previous year.
"Majority of the CFOs indicated no change in their need for raising both short-term and long term funds," Raghav said.
The survey said the larger number of CFOs in the services sector by around 51 per cent expects an increase in the level of financial risks for the corporate as a whole compared to the industrial sector which is near 45 per cent.
Around 50 per cent of the CFOs surveyed indicated tightening credit appraisal mechanisms to be their preferred mode of risk management over the next