THE INFLUENCE OF CORPORATE SOCIAL RESPONSIBILITY ON FINANCIAL PERFORMANCE

The study explores the relationship between Corporate Social Responsibility (CSR) and financial performance in the context of selected companies in India. The research objectives encompass examining the financial performance of two prominent Indian companies, Reliance Industries Ltd and HDFC Bank Ltd, and analysing the impact of CSR initiatives on their financial outcomes. The research employs secondary data, including financial reports and CSR disclosures, from the years 2018-19 to 2021-22. The sample size comprises two companies selected based on their market capitalization. Reliance Industries Ltd, a conglomerate operating in diverse sectors, and HDFC Bank Ltd, a leading private sector bank, are representative of companies from different industries and market segments. To achieve the research objectives, key financial performance indicators such as Net Profit Margin (%) and Return on Equity (%) are analyzed over the four-year period. These metrics provide insights into the profitability and efficiency of resource utilization for each company. The data is then correlated with the CSR expenditure to assess any potential impact of CSR initiatives on financial performance. The findings reveal that there is no significant impact of CSR amount spent on the Net Profit Margin (%) and Return on Equity (%) for both companies. Despite fluctuations in CSR spending, no direct correlation is observed between CSR initiatives and short-term financial profitability or returns generated on shareholders' equity. The study contributes to the existing literature on the interplay between CSR and financial performance in Indian companies. It highlights that CSR practices may not have an immediate impact on financial metrics but underscores the importance of CSR as a strategic and ethical imperative for sustainable business growth and societal well-being. While this study focuses on specific companies, the insights gained can inform future research and foster a broader understanding of the complexities surrounding CSR and financial performance relationships in diverse business contexts.