Analyzing CSR Spending and Its Influence on Financial Performance in the Indian Cement Industry

Particularly for ecologically sensitive industries like the cement business, corporate social responsibility, or CSR, has emerged as a critical component of company strategy. Over the course of 2014–15 to 2021–22, this study examines the empirical relationship between CSR spending and the financial performance of a subset of Indian cement companies. The study uses descriptive statistics, Pearson correlation, and linear regression analysis to investigate the effects of CSR initiatives on financial indicators like Net Profit Margin, Current Ratio, Net Worth Margin, Profit Before Depreciation, Interest and Taxes (PBDIT), and Enterprise Value to PBDIT (EV/PBDIT) using secondary data from the annual reports and CSR disclosures of six top cement companies. With PBDIT and Net Worth Margin displaying statistically significant results, the data suggest a typically positive correlation between CSR spending and important financial indicators. It would seem from this that businesses that incorporate corporate social responsibility (CSR) into their main business plans likely to have better long-term financial results. Despite the less clear-cut findings for liquidity and valuation metrics, the analysis backs up the idea that CSR is a strategic investment rather than just a compliance need. Investors, legislators, and corporate managers looking to strike a balance between sustainability and profitability will find these ideas to be helpful.