India CFOs focus on rationalising costs, bullish on M&As

Riding on improved business sentiment, India CFOs have the highest appetite for mergers and acquisitions (M&A) among peers in Asia Pacific, according to the Bank of America Merrill Lynch 2015 CFO Outlook Asia survey. Sixty-nine per cent of India CFOs said they would consider engaging in M&A activity in 2015 versus just 22 per cent last year and compared to the average of 37 per cent in the region.

While the top business goals of MNCs in India reflect aggressive expansion strategies, a majority of CFOs are focusing on rationalising costs. Around 79 per cent said they would improve profitability by improving working capital management and another 75 per cent by improving operational efficiencies. Nearly 47 per cent plan headcount reduction, the highest in the region.

Investing to grow revenues is a priority for 89 per cent of CFOs at MNCs in India - the highest in the region- followed by expansion into new markets at 73 per cent. Innovation in new business lines is also seen as a priority, cited by 68 per cent. Around 73 per cent of India CFOs say they would increase capital expenditure this year, substantially higher than the regional ratio of 58 per cent, indicating optimism in the business environment.