Business Confidence at 10-Quarter High: Business Today-C Fore Survey

The difference between business sentiment in the April-June quarter and the one that has just ended, the July-September quarter, is stark. After touching its lowest level of 43.2 in the previous quarter, the Business Today-C fore Business Confidence Index (BCI) jumped to 49.6 in the second quarter of FY22. The sentiments have moved up across businesses of all sizes – big, medium, small and micro. In fact, the index has touched its highest point in 10 quarters. 

What this indicates quite clearly is that business sentiments have rebounded strongly, along with the ebbing impact of the Covid-19 pandemic. As the economy opens up and business gets back to normal, India Inc.’s honchos are feeling better and better about the state of the economy and business. The rise in BCI is a direct result of the uptick in the economic activity over the past quarter. The unlocking of nearly all the businesses post the second wave followed by the demand pick-up has changed the outlook of business leaders.   

The index is based on a survey conducted with 500 CEOs and CFOs of companies across large, mid-sized and small organisations, in 12 cities namely Delhi, Mumbai, Chennai, Hyderabad, Bangalore, Kolkata, Chandigarh, Lucknow, Nagpur, Kochi, Vizag and Bhubaneswar. The survey was conducted between September 28 and October 4, 2021, and is also part of the October 31 issue of Business Today magazine, now on stands. 

For the outgoing (July-September) quarter, the ratings on all five parameters that form the survey – overall economic conditions, financial situation, demand conditions, profit margins, and hiring conditions – are better than the previous survey. In the case of financial situation, for example, the rating in the current survey stood at 4.9 (on a scale of 1 to 10) as against 4.1 in the June quarter. 

The outlook for the next quarter – October-December 2021 – is also positive across all parameters. For instance, the ratings on these parameters, barring hiring conditions, are more than 5. Importantly, the highest rating of 5.6 is for demand conditions. The survey points out that 80 per cent of corporate leaders are financially prepared to deal with a possible third Covid wave. Another 45 per cent believe that the government’s asset monetisation pipeline would provide a strong boost to economic activity and employment.  

Among other interesting insights from the survey, 63 per cent respondents don’t expect the cost of funds or interest outgo to increase over the next one year while 76 per cent respondents say that the rollback of moratorium and two-year loan restructuring provided by the RBI and the government (during the pandemic) would increase financial stress in the system. 

Aroon Purie,Chairman and Editor-in-Chief, India Today Group, of which Business Today is a part, said that the current survey highlights strong optimism among businesses. “Business sentiments were falling for several quarters, but the latest BCI has skyrocketed to break a 10-quarter record. While the survey results give fresh hope, we need to stay alert for near-term challenges such as the coal crisis, and rising commodity prices.”   

The way the BCI rolled 

Industry-wise Business Confidence Index 

The Business Today-C fore Business Confidence Survey, which captures the mood of corporate India, has become a bellwether of business and economic sentiment since its inception in January-March 2011. The methodology is simple—the responses to 10 questions pertaining to the present business climate and also to future expectations on are collated on a 10-point scale. The average confidence level is calculated and normalized to a 100-point scale.