Indian businesses expect quicker return to pre-COVID profitability levels than most others: Survey
New Delhi: Indian businesses expect a quicker return to pre-COVID levels of profitability than most others, and are positive about international trade despite the ongoing protectionism, says a survey.
According to HSBC’s annual Navigator survey, which covered more than 10,000 companies across 39 global markets in the world, including 350 firms from India, Indian businesses continue to have an appetite for growth and investment.
As per the survey, 87 per cent of Indian businesses, notably higher than the global average (73 per cent), expect to return to pre-COVID levels of profitability within two years, by the end of 2022.
“This is despite the significant economic impact of the global pandemic, where India had one of the world’s highest COVID case loads,” the survey said.
Besides, a majority (90 per cent) of Indian businesses intend to increase financial investment in their business to become more successful over the next year, notably higher than the global average of 67 per cent.
In terms of business outlook, almost half (45 per cent) of the surveyed Indian businesses are optimistic about business growth, much higher than the global average of 29 per cent.
“The overall business sentiment is understandably muted, given the challenging environment over the course of the year. However, we are witnessing signs of recovery as companies are charting new pathways to recovery,” HSBC India Head of Commercial Banking Rajat Verma said.
Moreover, the outlook towards international trade remains positive with around 93 per cent of Indian companies (as against 72 per cent globally) having a positive outlook in the next 1-2 years.
“This is despite the majority of businesses feeling that international trade has become more difficult and expect it to continue to be so in the next year,” the survey noted.
“We are confident about India’s consumption story and the opportunities it will offer on the path to recovery and economic growth. We also continue to believe that the optimism underlined in the survey by Indian companies is well founded and that India will continue as a very attractive investment and trade destination,” Verma said.
The survey further said almost all (98 per cent) of Indian businesses have concerns about their supply chain.
“The primary areas for investment in 2021 are aimed at increasing use of digital/technology and enhancing reliability of their supply chain. They believe that this will help increase the speed to market by moving closer to end buyer/consumer,” it noted.
In terms of challenges, a resurgence of COVID emerges as the biggest challenge to Indian businesses, threatening chances of recovery and growth over the next year.
In order to address threats and leverage growth drivers, Indian businesses identified improving the quality of their products/services (56 per cent) and investing in building new skills in the workforce (52 per cent) as two key areas.