Touching a four-year low, optimism level among Chief Financial Officers about the country's finanical and macro-economic conditions for the second quarter of this year has declined nearly 18 per cent, says a survey.
The composite CFO Optimism Index declined 17.8 per cent, on a quarter-on-quarter basis, to 96.2 for the second quarter of 2018, Dun & Bradstreet said today.
Optimism levels dipped for financial performance of companies as well as macro economic scenario, it said.
Around 61 per cent of CFOs have indicated domestic macro-economic scenario to be favourable in the second quarter even though it is the lowest since the third quarter of 2014.
"D&B Composite CFO Optimism Index for Q2 2018 has dipped to 4-year low. The dent in optimism levels manifested more strongly amongst the CFOs in the services sector compared to manufacturing sector," Manish Sinha, Managing Director (India), Dun & Bradstreet said.
When it comes to the services sector, the report said optimism level is the lowest in 17 quarters.
"The optimism level in the services sector remains mired amidst the frauds unearthed in the banking sector and the downswing in the telecom sector.
"Further, the sudden liquidity crunch faced by traders following the prohibition on LoUs (Letters of Undertaking) and LoCs (Letters of Credit) has also impaired optimism levels," Sinha said.
Around 300 CFOs participated in the survey.
"Fortunately, there are some positive signs on consumer demand from the prediction of normal monsoon, firming up of core inflation, strong demand for automobiles, continued pay commission awards, improvement in capital goods and fading away of the impact of demonetization and GST," he said.
According to the report, only 36 per cent of CFOs expect availability of funds in the market to increase, which is the lowest in four-and-a-half years.
Since the second quarter of 2017, CFOs have stated that reducing cost has been their top priority and dividend declaration as their least priority, it said.
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