Page 8 - Crisil Report

Steel sector boom to continue in FY24 but moderate in FY25 : CRISIL

The Indian steel sector has enjoyed a multi-year demand surge which will continue in the current FY'24 but it is expected to moderate in the coming fiscal, global analytics company Crisil said. The sector has witnessed double digit demand growth rate of 11 to 13 per cent during three consecutive years and is likely to moderate to 3 to 5 per cent in FY'25, Miren Lodha, Director Research, Crisil Market Intelligence and Analytics said on Friday. "We are clearly in the midst of a demand supercycle," Lodha told PTI. The moderation is likely in the long steel segment in FY'25 ahead of the general election. The only other instance of such a demand surge in the last two decades was between 2006 to 2008, he said. Lodha said the infrastructure sector, a key driver of the steel demand, is expected to maintain its momentum fuelled by ongoing government projects. The infrastructure segment has been driving a lot of momentum in the steel demand and is expected to continue in the coming years.

Residential realty's robust run, housing demand up 6-9% in top 8 cities

As the industry consolidates, residential developments are being executed by a handful of large developers who have successfully navigated the economic challenges posed by the pandemic

CRISIL analysis: India powering ahead on renewable energy targets

In generation terms, this would mean a 46 per cent penetration for renewable fuels

Shipping companies revenue may decline by 5-7% in next fiscal: CRISIL

Domestic shipping companies are likely to see a further 5-7 per cent decline in revenue in the next financial year amid normalisation of the rates, a report said on Thursday. This follows a steep 23-25 per cent fall in their revenue in the current fiscal (2023-24) after a 35 per cent growth in the last financial year when charter rates had surged because of geopolitical conflicts (including the Russia-Ukraine war) and higher demand from China post-pandemic, credit rating agency CRISIL said on Thursday. While the margin profile may vary widely across players operating in different segments, CRISIL said the average operating margin may continue to moderate to 33-35 per cent in the next fiscal driven mainly by the correction in charter rates. However, it will remain higher than the pre-pandemic levels of 25-30 per cent, the rating agency forecast. This along with modest capital expenditure (capex) plans, should sustain the healthy credit risk profiles of shipping companies, CRISIL ...

Indian PE/VCs deliver higher returns than bourses, says Crisil report

"A key contributor to this success has been the PE-VC markets, which have risked capital and sown financial know-how," said the Crisil report

Organised liquor industry to see rise in revenue on strong demand: Report

Strong demand and premiumisation are driving revenues of the organised liquor industry higher and the operating profitability of distillers and brewers is expected to increase amid softening of input costs, says a report. According to a Crisil Ratings report, the revenues of the organised liquor industry are expected to rise by 12-13 per cent this fiscal to Rs 4.45 lakh crore, on top of a 15-16 per cent growth last fiscal. Accordingly, the operating profitability of distillers and brewers is expected to increase by 100-150 bps with softening of input costs. This will also have a positive reflection on their credit profiles with strong balance sheets on back of significant deleveraging in the last three fiscals, the report said on Tuesday. The agency said the report is based on the largest 33 liquor companies, which account for around 15 per cent of the organised liquor segment revenue. The liquor industry can be broadly segmented into distillers and brewers. Distillers produce ...

States debt to stay elevated at 31-32% this fiscal: CRISIL report

States' debt will remain elevated at 31-32 per cent of their gross domestic product amid higher capital outlays and moderate revenue growth this fiscal, with overall borrowings likely to rise by 9 per cent to over Rs 87 lakh crore, a report said. Indebtedness of a state is measured as the ratio of its debt to gross state domestic product (GSDP). Before Covid, the debt-GSDP ratio was at 28-29. But the aggregate gross fiscal deficit (GFD) as a ratio of GSDP is expected to remain at 2.5, well below the mandated level of 3 under the Fiscal Responsibility and Budget Management Act, according to a Crisil Ratings report. With lower-than-expected revenue growth, states are forced to borrow more to expand capital outlays, besides meeting high committed revenue expenditure related to salaries, pensions and interest costs. This, along with modest single-digit revenue growth, will keep the debt level high at 31-32 per cent of their gross domestic output. The report is based on the numbers ...

CRISIL upgrades ratings on Inox Wind with stable outlook on debt shrink

Crisil has upgraded its ratings on Inox Wind Limited with a stable outlook, according to a regulatory filing. Part of INOX GFL Group, Inox Wind Limited is India's leading wind energy solutions provider servicing independent power producers (IPPs), utilities, public sector units (PSUs) and corporate investors. "CRISIL has upgraded its ratings from Crisil BBB+ to Crisil A- (long term rating), Crisil A2 to Crisil A2+ (short term ratings) with stable outlook in relation to ratings of its banking facilities," the company said in a regulatory filing. Crisil's rationale for upgrading Inox Wind's ratings reflects the steps undertaken by the promoters in fiscal 2024 to reduce debt, leading to significant improvement in the financial risk profile, improvement in the business risk profile which the company has demonstrated by delivering significant improvement in operating performance in the first half of fiscal 2024 and commercialisation of the 3.3 megawatt (MW) turbine. The upgrade in ratin

Fertilisers & diamonds may be hit slightly due of Mideast crisis: Crisil

Domestic credit ratings agency Crisil on Tuesday said some sectors such as fertilisers and diamonds may be slightly impacted by the conflict in the Middle East. On a broader basis, the conflict has caused only a negligible disruption in India's trade so far, it said in a note. Some sectors such as fertilisers and diamonds both cut and polished may see a slight, but manageable, impact, while for most others impact will be insignificant, it said. However, it said that the conflict which started after the surprise October 7 attacks by Hamas against Israel has driven up prices of gold and crude oil which need to be watched. It said crude oil price movements are especially important for a country like India which depends on imports, and added that elevated crude oil prices have a cascading impact on a host of other sectors that consume the oil itself or linked raw materials. The agency said India's trade with Israel is relatively low, with the country accounting for only 1.9 per ce

Costlier onion, pulses likely to push up thali prices in November: CRISIL

In October, the price of pulses, which accounts for a nine per cent share in the total cost of a veg thali, increased by 19 per cent year-on-year. This kept the thali cost from falling further, CRISIL

Data centres to see Rs 45,000 crore investments till FY26, says Crisil

The data centre industry is estimated to get investments of up to Rs 45,000 crore till the end of FY26, a domestic credit ratings agency said on Wednesday. The higher investments will be on account of demand for data and storage, Crisil Ratings said in a note. Large enterprises are increasingly embracing cloud solutions, which is fuelling the surge in demand for data centres, the agency said, adding that rising usage and adoption of Over-The-Top (OTT) platforms is driving up retail data consumption. It said mobile data traffic alone has risen at an annual rate of 45 per cent over the last five years. The newly launched 5G services will amplify data consumption among retail users even further, which will produce data that will finally be stored in data centres, the agency said. Moreover, there is an enhanced regulatory emphasis on local storage of personal data as stipulated under the Digital Personal Data Protection Act as well as through policies formulated by some of the sector

SBI mulls to raise up to Rs 10,000 cr tier-II bond issue next week

The bonds are rated AAA by consulting and rating firms CRISIL and India Ratings

Diamond polishing industry revenue may drop 30-35% this fiscal: CRISIL

India's diamond polishing industry will see its revenue drop by 30-35 per cent to USD 14-15 billion in current fiscal year on poor demand from the US, EU and China, rating agency Crisil said on Wednesday. These three geographies account for 75 per cent of India's polished diamond exports, it added. "Israel imports USD 1.25 billion worth of polished diamonds annually from India. With the country now declaring a war on the Palestinian militant group Hamas, this number could be at risk," said Rahul Guha, Director, Crisil Ratings. There is some increase in demand in the second half of every fiscal from festivities such as Thanksgiving, Christmas and the Chinese New Year, but this is unlikely to provide a significant offset this time, he said. "Consequently, we see the Indian diamond industry shrinking by over a third on an annualised basis this fiscal," he noted. According to Crisil, with the inventory of higher-cost polished diamonds piling up to over four months of sales, profitabil

India to spend Rs 143 trillion in infrastructure by 2030, says Crisil

Green investments will also see a five-fold rise from the past seven years to Rs 36.6 trillion

India's green hydrogen mission is high on ambition but low on resources

The subsidy per unit of green hydrogen output is minuscule compared to what Western powers are offering, and unconvincing for domestic offtake

North East Small Finance Bank to sell over Rs 600 crore stressed assets

Consequently, credit costs are expected to start tapering down gradually, leading to normalisation in profitability in the normal course of business

India Inc revenues to rise 8-10% in Q2, profit margins to expand: Crisil

India Inc is all set to report an 8-10 per cent jump in revenues for the September quarter while profit margins will also witness an expansion, an arm of rating agency Crisil said on Friday. This will be the first time in four quarters that the revenue growth will see an increase, it said. Automobiles, construction (which benefitted from truant monsoons) and information technology services sectors will be driving the revenue growth in the quarter, the rating agency said, adding that the year-on-year revenue growth in the preceding June quarter had stood at 7 per cent. The agency said its expectations are based on an analysis of 300 companies excluding ones in banking and oil sectors. "Growth in revenue was largely skewed towards consumer discretionary products and services, where automobiles and the retail sector led the pack, and construction-linked sectors, where companies accrued benefits from an early deployment of capital expenditure by the roads and railways ministries, Direc

Falling tomato prices bring down cost of veg, non-veg thalis in Sept

The fall in tomato prices, which declined 62 per cent month-on-month (M-o-M) to Rs 39 a kg in September from Rs 102 a kg in August, was the major contributor

Securitisation activity unaffected by HDFC merger, surges 35% in H1: CRISIL

Securitisation volumes have grown 35 per cent to over Rs 1 lakh crore in the first half of the current fiscal, domestic ratings agency Crisil said on Thursday. The overall volume of securitisation -- wherein one lender bunches up a loan or a set of loans and passes on the future receivables to another financier against an upfront payment -- had stood at Rs 75,000 crore in the April to September period, it said. It attributed the jump in activity to banks' continued interest in retail assets, and strong credit growth among originating Non-Banking Financial Companies (NBFCs). The volume remained unfazed by the exit of a large housing finance company (HFC) from the securitisation space in the second quarter of this fiscal, following its merger with an affiliate bank. "The exit of one of the largest originators last quarter has been more than made up by other financiers. The overall first-half volume is now trending in line with pre-pandemic levels when the FY20 volume had touched Rs 1

Softening of tomato prices brings down cost of veg, non-veg thalis in Sept

The tomato prices shrunk 62% in September to Rs 39 per kilogram (kg) as compared to Rs 102 per kg in August