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Impact of CSR on Financial Performance of Selected Two-Wheeler Companies in India

Yugal Kumar, Dr. Krishan Kumar & Dr. Neha Yadav

Corporate Social Responsibility (CSR) has become an essential part of modern business strategy, especially in industries that have a significant impact on society and the environment. The automobile sector is one such industry, as it plays a major role in economic development. In India, the importance of CSR increased significantly after the implementation of the Companies Act, 2013, which made it mandatory for qualified companies to spend at least 2% of their average net profits on CSR activities. The present study aims is to analyse the impact of CSR on the financial performance of selected two-wheeler companies in India for the study time period from 2019 to 2024. It examines whether companies that invest more in CSR activities shows a better financial result and employed financial ratios such as Net Profit Ratio (N.P), Return on Equity (ROE), Return on Assets (ROA) and Return on Capital Employed (ROCE). Understanding this relationship is valuable for managers, policymakers, investors and society. The present study concluded that coefficient of N.P was positive but weak and statistically insignificant which indicates that CSR spending does not improve short-term profit. Similarly, Return on Capital Employed (ROCE) and Return on Equity (ROE) shows that no significant impact of CSR activities on company performance. The R-square values were very low across all models, pointing to minimum explanatory power of CSR in predicting financial outcomes. The correlation results also reveals that CSR spending does not create noticeable short-term financial benefits. However, profitability ratios like ROE, ROCE, and ROA were strongly related with each other which shows a consistent internal financial patterns of the two-wheeler companies. Overall, the study suggests that CSR expenditure does not act as a short-term financial performance driver. The results imply that CSR may provide long-term non-financial advantages such as goodwill, reputation, stakeholder trust and ethical positioning, rather than immediate profit or return benefits.


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