Chief executives take positions on what the future holds for India Inc

Silver linings in view from the top

Team FE

There’s a bounce back in the gait of corporate India. That seemed to be the overwhelming feedback to a detailed survey and dozens of interviews that The Financial Express did with fifty Chief Executive Officers (CEOs) from across the country. FE correspondents farmed out in the five major metros including Delhi, Mumbai, Chennai, Bangalore and Kolkata. Quite deliberately, we at FE decided that we will take a detailed poll amongst the top management, rather than spread it across a wider section of the decision makers.

One reason for this, was because we felt that it would the mood at the top in some ways get translated down the line. Secondly, it was not a snap poll. But it was a very detailed set of interviews and questionnaire that took up some of the most critical issues in determining the current emerging mood for companies.

Third, to get the best flavour of representation from corporate India, we did the survey from companies that spanned a variety of sectors ranging from the consumer goods, food, manufacturing and infrastructure. Finally, it was also decided that we will not conform to just some of the top companies alone.

Rather, it would involve CEOs ranging from the top end of business groups and companies to the ones that are emerging and smaller. From this, we bring you the mood of corporate India and how they believe the silver linings on the horizon will pan out.

We took up six major issues that we felt would be the major factors in deciding how the companies see the issue of a potential recovery. Firstly, an overwhelming majority of the CEOs in the poll gave their thumbs up to the fact that there were silver linings emerging.

For example, out of the 50, 66 per cent or 33 CEOs felt that a recovery was clearly on the horizon. Only 5 CEOs felt that this was not so and 24 per cent or 12 CEOs were unclear about what the trend would be.

If that be so, then the next major agenda on the poll questionnaire was when an actual recovery could happen. An 60 per cent felt that this would happen in the second half of 2002, though a small fraction within this had also qualified, that maybe, the first signs could be seen even now. Of course, 15 CEOs representing 30 per cent felt that this would happen only by the end of 2002 and another small portion of 7 CEOs felt that a definitive period could not be predicted.

But which are the sectors that will lead this recovery and which will lag behind? A large majority put their bets behind the fast moving consumer goods segment, while a portion of them plumped for the agriculture and information technology sectors.

But a good proportion of 22 CEOs felt that it could even be wide variety of others sectors. The implication: there was no clear unanimity as to which sectors will take the lead though some broad direction of the trends and direction was available.

On the other hand, it was also largely expected that the sectors of infrastructure and steel will lag behind in the recovery process. The other sectors that the respondents felt would continue to be adversely affected were tourism, textiles and fertilisers. Clearly, this is along predictable lines where these industries are continuing to fare badly.

Now, the million dollar question? When will the stock market bounce back? Clearly, in tandem with the projections of recovery, the majority of the CEOs also gave their verdict that a possible stock market revival could happen sometime by the second half of 2002.
But interestingly, a large number of 20 CEOs forming 40 per cent of the total sample group also felt that the external conditions and times were such, that it was difficult to give a clear indicator.

Finally, despite all these silver linings, there are still questions marks about the long term sustainability of the current trend of projected recovery that is being seen. Importantly, the corporate sector is clearly worried about the environment on the political and military front.

They clearly believe and fear that any heightening of the tension along the border or in the region in the future could only dampen or reverse the current process that has been set in motion. That, then is also a a message to the political CEOs from their counterparts in the corporate world.