Page 2 - Fitch

Weak majority for BJP poses challenges to reform agenda, says Fitch

The BJP losing its outright majority and relying on allies to form a government could pose challenges for the more ambitious elements of reform agenda like land and labour, Fitch Ratings said in a note on Wednesday. Prime Minister Narendra Modi-led BJP lost its majority for the first time since 2014, winning 240 seats in the 543-seat Lok Sabha. It plans to form a government with smaller parties in his National Democratic Alliance, which won another 52 seats, giving the alliance a 292-seat majority. "It appears the BJP-led NDA is likely to form the next government, returning Prime Minister Modi for a third term, but with a weakened majority that could pose challenges for the more ambitious elements of the government's reform agenda," Fitch said. As the BJP fell short of an outright majority and will need to rely more heavily on its coalition partners, "passing contentious reforms could prove more difficult, particularly around land and labour, which have recently been flagged as ...

Fitch lowers Boeing 2024 aircraft delivery, free cash flow forecasts

The rating agency forecasts from 350 to 370 737 MAX deliveries and about 65-70 787 deliveries in 2024, below previous expectations of about 400 and 75, respectively

Banks' underwriting standards at risk amid consumer loan growth: Fitch

Fitch Ratings on Monday said Indian banks' risk appetite through higher loan growth will remain a key consideration for their creditworthiness despite improved financial performance. It said asset quality pressures from the previous credit cycle are subsiding, creating a favourable business environment. This has bolstered banks' potential and appetite for growth. Bank loans grew by 16 per cent in the financial year ended March 2024, similar to FY23, exceeding the 8 per cent CAGR (compound annual growth rate) over FY15-FY22. Retail loans constitute around 10 per cent of system loans, and grew at a 20 per cent CAGR since FY21, fuelled by a shift towards unsecured credit to expand margins, the US-based rating firm said. Large private banks gained significant market share in the last credit cycle and continue to grow rapidly; state banks also returned to brisk growth but lagged large private banks, Fitch said in a report titled 'Risk profile weighs on Indian banks' viability ratings ..

Indian Rupee likely to rebound to 82 per dollar on bond inflows: Fitch

The rupee is expected to appreciate to 82 per dollar by the year-end, from about 83.50 currently, said Jeremy Zook who is a director at Fitch in Hong Kong

Fitch expects HCLTech's revenue to grow by 8% in FY24-27, retains rating

Fitch attributed HCLTech's solid market position, diversified customer base, no country ceiling constraint, and robust profitability as some of the key drivers that led the rating

After RBI restriction, Fitch puts IIFL Finance on negative rating watch

"The move reflects a downside risk to IIFL Finance's franchise, profitability and overall risk profile if regulatory restrictions on new gold-backed lending are prolonged," Fitch said in a note

British American Tobacco signals ITC stake disposal, shares soar 7%

The maker of Dunhill and Lucky Strike cigarettes disappointed investors when it opted against a fresh buyback programme last year to focus on reducing debt and investing in new products

Deficit reduction will stabilise debt-to-GDP ratio over medium term: Fitch

Fitch Ratings on Friday said the slightly faster pace of fiscal deficit reduction does not significantly change India's sovereign credit profile but the government's emphasis on deficit reduction will help to stabilise the debt-to-GDP ratio over the medium term. In a post budget commentary, Fitch Ratings Director, Sovereign Ratings, Jeremy Zook said over the next five years, India's government debt-to-GDP ratio would be broadly stable at just above 80 per cent of GDP. This is based on a continued path of gradual deficit reduction, as well as robust nominal growth of around 10.5 per cent of GDP. In the interim Budget 2024-25, presented in Parliament on Thursday, the government revised lower its current year fiscal deficit to 5.8 per cent from 5.9 per cent budgeted earlier. The deficit, which is the gap between the government's revenue and expenditure, will come down to 5.1 per cent in 2024-25 and further to 4.5 per cent by 2025-26. Fitch said this demonstrates a firm desire to adher

Better profitability to support corporate rating headroom: Fitch Ratings

Profit margins of domestic companies are likely to swell by 290 basis points over FY23 levels, boosted by lower raw material costs and rising volume led by local demand, despite faster capacity additions in some industries, which will lead to their rating upgrades next fiscal, says an international rating agency. In a report on the domestic corporates in particular and the economy in general, Fitch Ratings Friday said it seems the profit margins of the corporates it rates jumping by 290 bps above the FY23 levels. But it was quick to warn that a sharp or sustained rise in energy prices, given the ongoing geo-political risks, presents downside risks to the projection. On the economy, it expects the country to be among the world's fastest-growing large sovereigns, with resilient GDP growth of 6.5 per cent in FY25, marginally down from a likely 6.9 per cent GDP print this fiscal. The higher growth will be buoyed by strong demand for cement, electricity and petroleum products. This alon

Lok Sabha elections: Will Modi govt return to power in 2024? Fitch answers

Lok Sabha elections 2024: The agency said that the size of the majority in the next Indian Parliament could influence the ambitiousness of the administration's reform agenda

Moody's warns US top-notch credit rating under threat, lowers outlook

Continued "political polarization in Congress raises the risk that lawmakers will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability," Moody's said

Indian banks' Viability Ratings to benefit from improved performance: Fitch

Indian banks' Viability Ratings (VR) will continue to benefit from improved operating conditions and performance in the near term, said a global rating agency. "We expect Issuer Default Ratings (IDRs) to remain stable across banks as they are driven by our expectation of extraordinary support from the Indian sovereign (BBB-/Stable), should there be a need," Fitch Ratings said in a statement. Two Indian banks' VRs were upgraded in 2023, with upside possible for several banks as Fitch expects the recent, better-than-expected, financial performance, mainly in asset quality and earnings, to be maintained, it said. The recent revision of the operating environment score to 'bb+' from 'bb' also supports the assessment, it said. Five of the eight Indian banks' VRs are in the 'bb' category, reflecting a moderate degree of financial strength, while the other three with VRs in the 'b' category are still weighed down by their risk profiles, weak financial metrics of the past and weaker ...

Fitch upgrades India's medium-term GDP growth projection to 6.2%

The ten emerging economies include Brazil, China, India, Indonesia, Korea, Mexico, Poland, Russia, South Africa, and Turkey

Fitch upgrades India's mid-term GDP growth forecast to 6.2% from 5.5%

Fitch blamed China for pulling down the estimate of 10 emerging countries to 4 per cent from 4.3 per cent earlier

Rising ownership costs to hurt commercial vehicle volume growth: Fitch

The ratings agency said increasing regulatory requirements, elevated inflation and high interest rates have pushed up the ownership costs, thereby weighing on purchase decisions

Fitch affirms SBI's long term rating at 'BBB' on asset quality, loans

Agency revises outlook for lender's asset quality score from 'stable' to 'positive'

FPIs withdraw Rs 2,000 cr in first week of Aug due to Fitch downgrading

After five months of sustained buying, foreign investors have turned net sellers and pulled out over Rs 2,000 crore from the Indian equities in the first week of August, mainly due to Fitch downgrading the credit rating for the US. In addition, the rich and stretched valuations and minor profit booking could be the reasons for this outflow, Yes Securities Chief Investment Advisor Nitasha Shankar said. "A sharp spike in the US 10-year bond yield above 4 per cent is a near-term negative for capital flows to emerging markets," Geojit Financial Services Chief Investment Strategist VK Vijayakumar said. If the US bond yields remain high, FPIs are likely to continue selling or at least refrain from buying, he added. According to the data with the depositories, Foreign Portfolio Investors (FPIs) withdrew a net sum of Rs 2,034 crore from Indian equities during August 1-5. This came after unabated net inflow in the past five months -- from March to July -- following the resilience of the In

Fitch Ratings downgrades US: A stern criticism of political standoffs

The Fed raised interest rates by 25 bps in March, May, and July 2023. Fitch expects one more hike to 5.5 per cent-5.75 per cent by September

Fitch downgrades US credit rating to AA+, Treasury calls it 'arbitrary'

Fitch downgraded the United States to AA+ from AAA, citing fiscal deterioration over the next three years and repeated down-the-wire debt ceiling negotiations

US ratings downgrade puts focus on remaining nations with top credit grade

Countries with highest credit rating at S&P Global Ratings, Fitch and Moody's Investors Service include Germany, Denmark, Netherlands, Sweden, Norway, Switzerland, Luxembourg, Singapore and Australia