CEOs expect growth in revenue, profit in H1FY23 despite inflation worries: CII poll

The country’s top chief executive officers (CEOs) are optimistic about growth in revenue and profit in the first half of the current financial year despite inflationary concerns, a poll conducted by the Confederation of Indian Industry (CII) has found.

Of the 136 CEOs who participated in the poll, 76 percent said their companies would achieve a revenue growth rate higher than 10 percent, while 45 percent believed profits would grow at that pace, CII said in a release on July 11.

The poll was conducting during CII’s second national council meeting for FY23 in Delhi.

Profits are expected to take a hit due to rising input costs with 48 percent companies expect the increased prices to affect their bottom line by five to 10 percent. Around 28 percent foresee an even bigger hit on profits.

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Companies are taking different routes to tackle the inflationary hurdles. As many as 43 percent of the companies said they passed on rising costs to consumers through a hike in prices, while the others focused on cutting costs to absorb the inflationary pressure.

Nearly half of the CEOs expect inflation to touch seven to eight percent in the first half of this fiscal and a majority batted for state governments to lower value-added tax on fuel to cool prices. The Centre had in May went for a deep excise duty cut.

The Russia-Ukraine war and the lockdowns imposed in China, too, have added to supply-side inflation.

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Indian businesses, however, are steadily reducing their dependence on China for imports, the poll indicated.

As many as 23 percent of the CEOs view the supply chain disruptions as an opportunity for Indian companies to gain market share by increasing exports.

The majority of companies remain optimistic about the country’s growth story, expecting the country to grow by seven to eight percent in the first half of the financial year. Almost half of the CEOs expect rural demand to emerge stronger than the corresponding period of the previous year.