Page 11 - Crisil Report

Crisil, Icra revise India's growth projections for FY23, Q2 GDP slashed

Rating agencies Crisil and Icra on Monday revised down their India growth projections for the current fiscal and the second quarter mainly due to the ripple effect of slowdown in global growth and mixed crop output. Crisil downgraded the India growth forecast by 30 bps to 7 per cent while Icra pegged the economic expansion at 6.5 per cent for the second quarter of FY2022-23. "We have revised down our forecast for real gross domestic product growth to 7 per cent for fiscal 2023 from 7.3 per cent, primarily because of the slowdown in global growth that has started to impact our exports and industrial activity. This will test the resilience of domestic demand," Crisil chief economist Dharmakirti Joshi said in a note. Aditi Nayar, his counterpart at Icra, in her report pencilled a 6.5 per cent growth in Q2 of the current fiscal, nearly half of the year-ago quarter when the economy had clipped at 12.7 per cent, but which is still a tad higher than the monetary policy committee's Septembe

Bank credit to grow 15% this and next fiscals as economy recovers: CRISIL

Riding on a broad-based economic recovery and stronger, cleaner balance sheets, lenders are expected to see their credit growing at 15 per cent this fiscal and the next, a report said on Tuesday. Credit growth so far this fiscal has printed in at around 18 per cent, which is a decadal high. Already, large lenders have seen corporates flocking to banks for funds for capital expenditure and also for working capital as the demand side of the economy is faring better. SBI has the best corporate loan sales in Q2 recording a 20 per cent growth and so did most other lenders including private sector banks. Bank credit is seen growing 15 per cent per annum in fiscals 2023 and 2024, Crisil said in a report. The agency said that its forecast is based on an expected 7 per cent GDP growth this fiscal, as well as the expected continuation of the credit push from government's infrastructure spends, higher working capital demand in a high-inflation environment, and some substitution of debt capit

Weak revenue, high capital outlays to keep States' debt at decadal high

The aggregate indebtedness of states, is expected to remain elevated at 30-31 per cent this fiscal, almost similar to 31.5 per cent of last fiscal, Crisil report said

Data goes private: Positive for India but also a challenge for the govt

The quality of some of the important economic statistics put out by the govt - for much of which there can be no comparable private substitute - remain questionable and undependable, writes T N Ninan

Air traffic volume may recover to pre-pandemic level in FY23: CRISIL

The air traffic volume is expected to increase to the fiscal 2020 level of around 340 million passengers in FY23

Cement firms' profitability seen dipping 15% on input costs: Report

Despite a high double-digit demand growth, the profitability of cement companies is set to fall by 15 per cent because price hikes lag increase in production cost, according to a report. The report by rating agency Crisil, however, said that higher demand will cushion the credit outlook for the sector. Operating profitability of cement makers will decline 15 per cent year-on-year to Rs 900-925 per tonne this fiscal, adding to the pain of a 9 per cent decline last fiscal, as an increase in realisations will not be enough to offset the increase in prices of coal, petcoke and diesel that has pushed the average cost of production higher, the agency said in a report on Monday. However, the 17 per cent demand growth in cement demand during the first quarter, albeit on the low base last fiscal, offers a silver lining, the report noted, saying though growth may taper in subsequent quarters, and print in at 8-10 per cent for the full fiscal, it will still be the highest since fiscal 2019. O

ITeS sector's growth prospects in FY23 augur well for SMEs: CRISIL

In FY22 the ITeS sector's revenue logged 13-15% growth to about Rs 3.1 tn, riding on volume recovery across the three key segments - customer relationship management (CRM), knowledge, and transactions

Large-panel TVs' share has tripled in 5 years to over 40%: CRISIL report

Sharp 35-40% decline in prices over the past five years has been the key growth driver; other tailwinds include greater rising incomes, higher OTT consumption and deeper web penetration

Housing finance companies' AUM to grow 10-12% in FY23, says CRISIL

Meanwhile, one segment where HFCs have been growing relatively faster is affordable housing loans, where competition from banks is limited

Organised food, grocery retailers' revenues to grow 20% YoY in FY23: Crisil

Also, despite heightened competition from quick commerce players, revenue of food and grocery retailers will be higher by 38% over FY20

Container shipping charter rates set for course correction: Report

Container shipping charter rates are set for a course correction after touching historical highs in 2021 and staying elevated so far this year, according to a report. It also expects margins of the Indian shippers squeezing this fiscal even as they will be higher than the pre-Covid level. Charter rates were up 156 per cent year-on-year for the first seven months of this year, according to Crisil Research. Over the remaining months, however, the rates are expected to decline, though still ending the year 40-70 per cent higher, it said. These rates are likely to slide a further 30-50 per cent in 2023 on account of the expected recessionary environment in the majority of the consumption economies and consequent fall in demand for discretionary goods, according to the report. It also noted that a widely anticipated recessionary environment is expected to weigh on demand in key consumption countries in the West towards the end of the year, among other factors for the anticipated furthe

NBFCs' asset growth to touch four-year high of nearly 11% in FY23: CRISIL

Non-bank lenders' asset growth will jump to a four-year high of 11-12 per cent this fiscal, a ratings agency said on Monday. The non-bank finance companies (NBFCs) segment has witnessed three consecutive years of constrained asset growth due to the COVID-19 pandemic, with the growth coming at 5 per cent in FY22, Crisil Ratings said. However, its deputy chief ratings officer Krishnan Sitaraman said that even as the asset growth jumps to double digits, it will still be lower than the pre-pandemic levels which witnessed a 20 per cent growth during the three years to FY19. "Intense competition from banks and the rising interest rate scenario will limit the competitiveness of NBFCs in certain segments, leading them to focus on higher-yield segments for growth," he said. Vehicle finance, which constitutes nearly half of the assets for NBFCs, will grow at 11-13 per cent in FY23, as against 3-4 per cent in FY22 and FY21, the agency said. Used vehicle financing, with its higher yields, wil

'Consumer durables sector revenue to rise 15-18% to cross Rs 1 trn in FY23'

Despite increasing margin pressure, the consumer durables sector is likely to witness a double-digit volume growth, pushing its revenue up by 15-18 per cent to Rs 1 lakh crore this fiscal, according to a report. According to the report, a 10-13 per cent spike in demand/volume, which will be driven by both urban and rural segments -- led mostly by the AC and refrigerator segments, though rural demand will come into play in the second half of the fiscal. The industry had crossed the pre-pandemic mark in value terms last fiscal, and this fiscal, it will scale past the pre-pandemic volume mark by 3 per cent, a Crisil report said on Wednesday. The Crisil report said a 10-13 per cent spike in volume will boost the top-line of the sector by 15 to 18 per cent this fiscal, taking past the size of the durables industry to over Rs 1 lakh crore, which will be 3 per cent above the pre-pandemic size. However, margins are under pressure given the run-away commodity prices of inputs like copper, .

Receivables of leading RE companies to shrink 20% this fiscal: Crisil

Receivables of leading renewable companies will shrink 20 per cent during this financial year, Crisil Ratings said. Leading renewable energy (RE) companies are set to see their receivables reduce a fifth from 180 days a year ago to 140 days as of March 2023, a level last visible pre-COVID, the agency said in a statement. According to the statement, two-thirds of the improvement will be because of increasing central counter-party offtake, and the rest due to state discoms implementing the late payment surcharge (LPS) scheme. The incremental cash flow will allow RE companies to build capacity for growth and reduce leverage, it opined. Payment cycles had stretched in the past two fiscals because state discoms such as Madhya Pradesh, Maharashtra, Telangana and Andhra Pradesh (accounting for 23 per cent of the overall capacity exposure) held back payments to RE developers following liquidity crunch or contractual disagreements, it added. This increased the overall cycle for the 10 asse

PFC's power drive flickering under record debt burden, govt scheme

The state-run financer for generators and distributors is struggling under a record debt burden even as it is being asked to underwrite the government's latest scheme to rescue inefficient discoms

Aluminium prices may go up over medium term, says Crisil Research

The price of aluminium is likely to go up in the medium term due to factors like surge in demand, Crisil Research on Tuesday said. The price of the metal fell 45 per cent from the March 2022 peak to around 2,400 dollar per tonne now due to factors like lockdown in China. "Aluminium prices have likely bottomed out and should rise over the medium term, supported by two structural drivers: limited smelter capacity additions and uptick in demand," it said in a statement. Limited capacity additions over the next five years will be crucial to pick up in the prices of aluminium, it said. The demand for aluminium is likely to see a structural growth over the medium term on account of global green investments, including electric vehicles, solar panels and renewable energy grids, most of which have high intensity of aluminium use. "Green investments across major economies will lead to a strong uptick in demand for aluminium, but global capacity addition is expected to fall from 20 MT during

CRISIL SME tracker: Export duty will hurt large steel players, spare MSMEs

MSMEs, which make up 90-95 per cent of re-rollers, witnessed a sharp margin contraction in FY21 owing to iron ore unavailability, and logistics and labour issues, among other factors

Punjab & Sind Bank's asset quality deterioration to moderate: CRISIL

Decrease in slippages and higher recoveries to help state-owned lender, says agency

Kotak's maiden FoF eyes first close with Rs 500-crore commitment

It also intends to invest some money into co-investment opportunities available from such investee funds

Rupee at 80: Little relief on the cards from high trade deficit

Due to global risk aversion on the back of geo-political tensions and aggressive policy tightening by the Fed, the dollar has appreciated against most currencies, including the rupee