Indian businesses have used the downturn well, to cut costs and improve efficiency - Price waterhouse Coopers

- Organic growth is the path to economic growth over the medium term apart from acquisitions and alliances as per the PwC report

Bengaluru, Karnataka, India - November 9, 2009 - The global meltdown changed the growth oriented objectives of Indian businesses, and there was a renewed focus on operational effectiveness to ensure survival and companies undertook various measures to achieve this as per a PricewaterhouseCoopers survey, Beyond the Downturn.

With over 91% respondents implementing significant cost reduction and 70% reviewing operational/working capital cycle, India Inc. seems to have mitigated the impact of the meltdown on their businesses. With the economy appearing to be on a path to recovery, India Inc. is cautiously optimistic about its prospects and is beginning to assay growth again but is still wary of large capital commitments.

The report focuses on how Indian businesses can be expected to act in looking for growth over the next 12-18 months as the world economy recovers. The survey was conducted amongst the CEOs, CFOs and group heads of diversified Indian businesses to understand what India Inc. feels about the impact of the downturn on their business prospects.

As per the report, respondents ranked cash flow management, difficulty in forecasting results and maintaining employee morale during the downturn as key constraining factors. Majority of the survey respondents identified benefit from achieving increased operational effectiveness by following cost reduction, reduction in working capital and optimisation of supply chain as a significant opportunity resulting from the downturn.

Strong domestic economy, stable banking and financial system and timely government intervention were cited as key factors responsible for the reduced impact of the downturn on India. These factors are also cited as the key to expectations around a faster economic recovery.

The report highlighted that an overwhelming 99% of respondents viewed stable or growing demand/volumes as their key recovery expectation with new hiring/ capacity addition getting the second priority. Business Leaders have voted for organic growth as a key strategy for growth over the medium term. The respondents identified risk appetite, market growth and funding availability as key constraints in taking advantage of existing and emerging acquisition/ alliance opportunities.

Bharti Gupta Ramola, Leader - Financial Advisory Services, said, "We believe that the focus is more on organic growth and that acquisition opportunities would be more rigorously scrutinised, but these times offer unparalleled opportunities to Indian companies buoyed up with domestic demand to achieve world class scale. We believe that Indian entrepreneurs should not let this opportunity go unaddressed."

Source : IndiaPRWire

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