Business revenue to recover by Jun-20: Press Release - PwC India

• 73% respondents expecting lower revenues in FY21, but only 15% expecting the decline extending to FY22
• Digital enablement has emerged as an important intervention that businesses are undertaking.
• Building organisation wide resilience to future shocks would be a key endeavour of CXOs.

Mumbai, 30 July 2020: PwC India has surveyed 225 CXOs across industries to assess the impact of the COVID-19 crisis, the challenges it poses, the emerging new paradigms and the interventions being considered by business leaders. The report titled ‘COVID-19: Path to Recovery’ analyses Corporate India’s journey through survival to value conservation to eventually value creation.

The report suggests that Infrastructure, Real Estate, Industrials, Retail, Hospitality and Media & Entertainment suffered significant revenue decline due to the crisis. Collapse in demand, supply chain disruptions and liquidity constraints were the top reasons for the decline. Sectors such as IT, Healthcare, Pharma, Telecom, Utilities and Consumer Essentials were somewhat resilient. Crisis management and agility to adapt to the changing market were the key for resilience.

The priorities for most respondent organisations have evolved from survival initiatives like employee well-being & availability and business continuity during the lockdown to rebound initiatives like recapturing demand and optimising costs post unlock. While debt moratoriums have helped industries, liquidity continues to be a major concern. 58% of the respondents expect a tougher business environment in the near term for reasons including greater competition, higher costs, increased price sensitivity of customers, funding challenges, and changing regulations.

An overwhelming 77% of the respondents would like to accelerate digital enablement. Other significant interventions anticipated by the respondents include localisation of manufacturing/ supply chains, development of newer logistics models, collaboration to add capabilities & navigate bottlenecks and development of newer products & services centred around emerging themes & affordability. 45% of the respondents are keen to consider acquisitions, whereas 20% are considering divesting non-core businesses. 26% of the respondents would be looking to raise funds.

Organisation- wide initiatives have evolved from ‘repair’ to ‘rethink’ to eventually 'reconfigure' as the crisis has progressed. The survey indicates that the ‘repair’ and 'rethink' phases would last until mid-2021, post which the ‘reconfigure’ phase is likely to commence.

Last but not the least, CXOs were asked about their definition of success out of COVID-19. 34% would like their organisation to be more resilient followed by 19% who wanted to gain/ protect market share and 19% who wanted to achieve break even cash flows.

Sanjeev Krishan, Chairperson, PwC in India, states, "Business leaders have adapted well to this unprecedented situation and are optimistic of recovery. We noticed a pragmatic progression in the steps taken by CXOs from ‘repair’ to ‘rethink’ to ‘reconfigure’ in future. In this tougher business environment, digital enablement has become key for remaining competitive and resilient. We also expect a higher level of collaborations across the value chain. Value creation has become even more critical and deal-making is going to be an important lever. The crisis has brought resilience to the fore and we expect boardrooms to take due cognisance of it."

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