Indian CEOs forge ahead with AI and M&A strategies

The recent EY CEO Outlook Pulse Survey 2024 highlights Indian CEOs’ strong confidence in Artificial Intelligence (AI) as a catalyst for business success. They foresee AI and technology driving growth, productivity, and influencing investment strategies. While optimistic about company revenue (80%) and profitability (88%), they remain cautious of the broader economic landscape, particularly geopolitics, market stability, and inflation.

Strategically, Indian CEOs are focused on technology acquisition, new production capabilities, and innovative start-ups, with 70% planning to increase spending on AI and technology. The survey shows that 44% view these acquisitions as key growth drivers. Concurrently, 56% emphasise enhancing data management and cybersecurity to protect digital assets amidst rising threats.

Mergers and acquisitions (M&A) are a significant focus, with 96% of CEOs considering transactions in the coming year, primarily through IPOs. CEOs are also preparing for divestments, spin-offs (64%), and exploring joint ventures or strategic alliances (28%). Confidence in handling deal complexities, including tax, regulatory, and integration challenges, is high, with 52% confident in functional capabilities and 42% in advanced capabilities.

Sustainability is increasingly prominent, with 60% of CEOs recognising its importance. However, the concept of ‘green-hushing’ has emerged, where companies avoid publicising sustainability efforts to evade greenwashing accusations. 

Financial pressures and shifting priorities create a divided perspective, with 44% aware of sustainability’s supply chain impact but 40% opting for ‘green-hushing.’ CEOs highlight the need for improved alignment between consumer behavior and sustainability goals, advocating for global governmental coordination and consistent climate change policies.

Indian CEOs are optimistic about future economic growth and company performance, driving their emphasis on technology, innovation, M&A, and government infrastructure investments. They navigate complex challenges by focusing on stakeholder value, decarbonisation, and adapting to disruptions in an unpredictable business environment.