Rated firms' credit quality improves in Q1, along with biz sentiment: CARE

Manufacturing, Infra firms see uplift; NBFCs face hit

Building on economic recovery in late FY21, the credit quality of rated firms improved in the June 2021 quarter. The reading on modified credit ratio (MCR) was 1.04, indicating an increase in proportion of upgrades vis-à-vis downgrades.

Rating agency CARE said the MCR is on an improving trend, reflecting improvement in business sentiment after going to a low of 0.88 in Q1 FY21, which was the lowest level that it has touched since Q4 FY13.

The economic recovery to be slow paced (in FY22) and thus estimates a stable MCR, closer to one for the coming quarters. An MCR closer