Second Covid-19 wave impact manageable for most of India Inc: Fitch

'Weaker domestic demand is a key channel of risk transmission for businesses. However, lockdowns in 2021 have been less stringent,' says the rating agency

The impact of the second Covid-19 wave on rated Indian firms is expected to be manageable, as most companies’ credit profiles are supported by their strong market positions, adequate balance sheets, liquidity and diversified operations, Fitch Ratings says.

They have the flexibility to adjust costs and key business drivers, until operations recover with the easing of restrictions.

There are, however, several entities with low rating headroom or which could face negative rating action if India’s sovereign rating (BBB-/Negative) or Country Ceiling (BBB-) were downgraded.

“We believe the second wave will have a less severe impact on corporations than in 2020, despite a higher