New Delhi: A majority of CEOs in a poll conducted by CII anticipate improved job creation prospects in their companies in the first half of FY23 ending September, even as expectations of monetary tightening are pervasive, the industry body said on Sunday.
The recent poll was conducted by CII at its Second National Council Meeting for FY23, which saw the participation of 136 CEOs from across the country.
”Further, GDP growth is expected to be in the range of 7 percent to 8 percent as revealed by 57 percent of the CEOs while only 34 percent of them anticipate below 7 percent expansion in the economy,” said CII.
Besides, about half of the CEOs (49 percent) felt that rural demand would be better in H1 FY23 as against the same period last year.
The results reveal that while expectations of monetary tightening are pervasive, given the sharp increase in inflation and heightened inflation expectations, the overall outlook for H1 (April-Sept) FY23 looks robust, CII said.
A major percentage of the CEOs revealed an upbeat sentiment — as 44 percent of them felt that their company’s revenue growth would be in the range of 10 percent to 20 percent during the first half of FY23, followed by another 32 percent of the CEOs anticipating a bigger jump in revenues, of more than 20 percent during the same period, CII stated.
Moreover, 45 percent of the CEOs indicated that their companies’ profit growth is likely to increase more than 10 percent, whereas 40 percent of them believed that profit growth may stand slightly lower, up to 10 percent, during H1 FY23.
”The CII CEOS Poll results demonstrate the resilience of Indian industry and the positive business performance outlook both on domestic as well as exports front despite challenges of high inflation leading to monetary tightening, rising input prices and uncertain global economic conditions,” said Chandrajit Banerjee, Director General, CII.
The survey revealed that 46 percent of the CEOs polled indicated that rising input prices would affect their profits between 5 percent and 10 percent during H1 FY23, followed by another 28 percent of them who expect a bigger hit to their profits, between 10 percent and 20 percent.
However, only 43 percent of the CEOs indicated that their companies had increased output prices to accommodate the input price rise in recent months, while nearly 57 percent of them either absorbed the input price rise, and of these about 30 percent improved efficiency thereby reducing the costs of their output.
”On the topic of jobs, a majority of the CEOs expected improved job creation prospects in their companies during H1 FY23 as compared to the same period last year,” CII said on the survey findings.
The respondents have also cited high inflation expectations as nearly half of them (48 percent) foresee inflation to be in the range of 7-8 percent during H1 FY23.
”Given the current stresses, in terms of high input prices and inflation, nearly two-thirds of them (64 percent) are of the view that now the state governments must act to reduce VAT on fuel after the cut in excise duty by the central government in May,” said CII.
On the external front, while a large number of the CEOs expect further depreciation in the rupee and expect it to stand at more than Rs 80/US dollar during H1 FY23, a majority of them (55 percent) also expect their exports to benefit from it and perform better in H1 FY23 versus last year’s levels, said CII.
However, on the imports front, about 50 percent of the CEOs indicated mild to moderate disruption in the supply of inputs during the first half of the current year compared to the first half of last year.
Assessing the impact of recent geopolitical developments and recent COVID-related lockdowns in China on their respective companies, 30 percent of the CEOs revealed that they have faced moderate supply chain disruptions but have diversified away from China to some extent, while 25 percent of them indicated only minor supply chain disruptions as they have diversified majority of the procurement away from China.