look news india
New Delhi: Indian companies have benefited from favorable macroeconomic conditions. The credit quality of Indian corporates improved between October 2023 and March 2024 (LL2K24) due to government-led capital expenditure, sustained domestic demand and lower debt on the balance sheet.
According to rating agencies CRISIL, ICRA and India Ratings, the number of rating upgrades in the second half of FY2024 is higher than downgrades.
According to rating agency CRISIL, there were 409 upgrades and 228 downgrades in H2FY24. The ratio of rating upgrades to downgrades in the second half of FY2024 declined to 1.79 times from 1.91 times in April September 2023 (H1 FY2024).
All 3 rating agencies were positive on the debt quality of companies in the new financial year starting April 2024. The credit quality outlook remains positive with upgrades outweighing downgrades. This has been boosted by domestic demand, low corporate debt and ongoing work on infrastructure.
Most of the rating upgrades in the second half of FY2024 will be due to company-centric factors such as market share growth or order book, improvement in cost structure, etc. This is due to low project risk. Aviation, hospitality, auto & auto parts and banks are some of the sectors where ratings were upgraded during FY24.