As Indian CEOs prioritise investments in new technologies to become future-ready in the pandemic times, only 33 per cent are confident of the growth in their domestic economy and just 42 per cent are optimistic about growth prospects of their company, a KPMG in India report said on Wednesday.
This figure was 78 per cent and 84 per cent at the beginning of the year, respectively.
This weakened view on the growth prospects is in line with that of CEOs globally.
"The CEOs in India are also less confident of their companies' earnings. About 19 per cent CEOs in India expect the earnings of their companies to either remain flat or decline," revealed KPMG in India's ‘2020 India CEO Outlook : COVID-19 Special Edition'.
However, CEOs in India seemed to be better positioned than their global counterparts in terms of growth prospects of their companies' earnings with 23 per cent CEOs globally foreseeing their companies' earnings, stagnating or declining.
CEOs globally feel a greater need to re-evaluate their purpose amid Covid-19, than CEOs in India.
Nearly 79 per cent of CEOs globally have had to re-evaluate their purpose, as compared to only 37 per cent of CEOs in India, highlighting the confidence that CEOs in India are placing on their current leadership approach and purpose.
"Looking forward, similar to their global counterparts, CEOs in India are less confident about global and domestic economic growth than they were at the onset of the year. Their earnings outlook is clearly challenged," said Arun M Kumar, Chairman and CEO, KPMG in India.
The findings revealed that the agenda of leaders has radically shifted since the beginning of the year, as existing trends like cost-optimisation strategies, rethinking of supply chain strategy, enhancing ESG (environmental, social and corporate governance) programmes and aligning with the new work realties have accelerated.
One-third of the CEOs in India have confidence in the country's economic growth and 62 per cent CEOs altered their own compensation, as part of the broader objective of cost optimisation and cost management to sail through the pandemic.
"If anything, COVID-19 has only acted as a catalyst to accelerate digital transformation with companies today spending more than what they originally planned for on digitisation in spite of uncertainty in earnings," said Vikram Hosangady, Partner and Head, Clients and Markets, KPMG in India .
In India, Covid-19 has led to a dramatic shift in how business leaders are assessing potential risks now, compared to the pre-pandemic times.
The CEOs in India, while ensuring short-term survival of their companies, are likely to delve deeper into the impact of this crisis to realign strategies for long-term growth.
"Companies will resort to Zero-based budgeting on all discretionary spends for the next two- three years and question the very need for some of these spends. This is likely to make them leaner, meaner and significantly more profitable when growth returns," added Hosangady.
The CEOs in India also view supply chain risk as a major threat. The number of CEOs highlighting this as a critical risk rose five-fold since the onset of the pandemic..
