Page 12 - Icra

Treasury income's contribution to bank P&L's in Q3 to be modest: Analysts

The widening of the spread on state-government paper over central government bonds may work as a dampener, according to treasury executives

Credit growth to dip to 12-13% in FY25 from 16.5% in early Dec 2023: ICRA

Tight liquidity, hike in risk weights to impact bank loan growth

ICRA assigns AA+ rating to Adani Ports on strong business profile

While ICRA said its rating factors in the company's strong business profile, India Ratings said it continues to take a consolidated view of the company and its subsidiaries

Jewellery retail trade expected to grow at 10-12% in FY24, says ICRA

The domestic jewellery retail industry, in value terms, is expected to grow at 10-12 per cent during the current financial year on the back of elevated gold prices, credit rating firm ICRA said in a report. In the last financial year, the industry had grown by more than 15 per cent. ICRA said that demand volumes remained stable in the current festive season despite higher prices. The research firm said organised jewellery retailers are expected to outperform the industry over the medium term, driven by planned retail expansion and tailwinds from the accelerated formalisation of the trade. After remaining volatile between December 2022 to April 2023, gold prices were relatively stable in the range of Rs 5,600 to Rs 5,700 per gram in the first half of the current fiscal. This was almost 14 per cent higher as compared to the price levels in the preceding first half. The rating firm said the elevated price levels supported the revenue expansion of most jewellery retailers in the face

Margins of North Indian tea gardens to shrink in FY24, predicts ICRA

Leading credit rating firm ICRA said that tea gardens of North India will suffer from shrinkage in the margins due to rise in input costs and wage hike in West Bengal and Assam during the current fiscal. Margins will also be affected due to low export demand and sluggish rural consumption, ICRA said adding that the outlook for the sector has been revised to negative from stable. The credit rating firm said that all-India auction prices of the orthodox variety in the first 10 months of calendar year 2023 witnessed a significant decline of around Rs 51 per kilogram on a year-on-year basis. The price drop in South India was lower at Rs seven per kilogram during the same period. ICRA said that the slump in orthodox tea realisation was due to lower export demand, primarily from Iran. Similarly, the all-India cumulative auction average of CTC variety also witnessed a decline during the first 10 months of 2023 to the extent of Rs six per kilogram. ICRA said that sluggish rural demand alo

Aviation industry expected to see 10-15% revenue growth in FY25: ICRA

The pace of recovery in the industry earnings will be gradual owing to the high fixed cost nature of the business

Airlines likely to prune losses to Rs 3,000-5,000 cr in FY24: ICRA

Indian airline industry is expecting to prune its net losses to Rs 3,000-5,000 crore in this fiscal from an estimated Rs 17,000-17,500 crore in FY2023 on the back of improved yields and stable cost environment, credit ratings agency ICRA said on Tuesday. At the same time, ICRA also estimated that domestic air passenger traffic will expand by 8-13 per cent each in FY2024 and FY2025. The rating agency has also maintained its stable outlook on the industry in view of healthy passenger traffic growth, improved yields and a stable cost environment. Building on the fast-paced recovery in FY2023, ICRA at a webinar on Tuesday said it is expecting the domestic air passenger traffic to grow by 8-13 per cent in the ongoing financial year, thereby reaching 150-155 million and surpassing the pre-Covid levels of 141.2 million seen in FY2020. The Industry's net loss (is expected) to shrink to Rs 30-50 billion in FY2024 from an estimated Rs 170-175 billion in FY2023, aided by improved yields and .

ICRA revises FY24 GDP growth forecast to 6.5%, still below RBI's estimate

Domestic rating agency Icra on Monday revised its FY24 GDP growth forecast to 6.5 per cent from 6.2 per cent earlier. However, the revised forecast is still much lower than the Reserve Bank of India's (RBI's) 7 per cent real Gross Domestic Product (GDP) growth estimate for the ongoing fiscal. Earlier this month, the RBI had revised upwards its GDP estimate to 7 per cent from 6.5 per cent, calling the revised number a "conservative" one. The rating agency did not specify reasons for the lower growth estimate made in its business activity monitor. The revision is being done because Icra feels the deflation in commodity prices will be sustained and there are expectation of better growth in the October-December period than previous estimates, it said. "The festive-led uptick in volume growth in high frequency non-agri indicators as evinced by ICRA Business Activity Monitor in October-November 2023 (11.3 per cent versus the 9.5 per cent in Q2FY24) leads us to believe that the GDP growt

Gautam Adani's copper foray may further tighten global supply of ore

India's imports of copper concentrate could grow to as much as 2 million tons in 2024, from 1.3 million tons estimated for this year, said Soni Kumari, commodity strategist at ANZ Banking Group

Refined copper demand likely to grow 11% in FY24 on infra boost: ICRA

India's refined copper demand is likely to grow 11 per cent in the current financial year on the back of the government's thrust on infrastructure development and a gradual transition to green energy, ICRA said on Monday. The rating agency further said it expects a stable outlook for the country's domestic sector. "ICRA projects copper prices to remain range-bound at current levels of 8,2008,300/tonne in the near term," it said in a statement. It further said that the allocation of Rs 10 lakh crore for capital spending in the last Union Budget, coupled with ambitious targets set under the National Infrastructure Pipeline (NIP), is likely to drive copper consumption in the medium term. In addition, in the real estate sector, significant incremental supply growth of 30 per cent in the top six Indian office space markets and 10 per cent growth in retail mall space is likely in FY'24, which is likely to spur copper wire demand. Significant emphasis by the government on the smart city

Renewable energy capacity to reach 170 GW by March 2025: ICRA analyst

India will add another 38 gigawatt (GW) of renewable energy capacity by March 2025 to touch 170 GW-mark, aided by moderation in solar module prices, an Icra analyst said on Thursday. The country's installed renewable energy capacity was at 130 GW as of October 2023, Vikram V, Vice President & Sector Head - Corporate Ratings, Icra, said in a webinar. Indian Renewable Energy (RE) capacity is expected to reach 170 GW by March 2025, led by strong policy support and moderation in solar module prices, he said. The capacity addition thereafter is likely to be supported by the significant improvement in tendering activity in the current fiscal with over 16 GW projects bid out so far and another 17 GW bids underway by the central nodal agencies, Vikram said. The share of RE-based round-the-clock (RTC) projects is expected to rise in upcoming tenders to mitigate the intermittency risk associated with renewables. This is in line with the 50 GW annual bidding trajectory announced by the ...

Indian IT battles slowdown in US, hiring to be muted for next 2-3 quarters

This implies that hiring will be in the slow lane even in the first quarter of FY25

Credit metrics of India Inc may improve to 4.5-5 times in Q3 FY24: ICRA

India Inc's credit metrics are likely to show slight sequential improvement in the third quarter of the current fiscal, with interest coverage increasing to 4.5-5 times, rating agency Icra said on Friday. This would benefit from improved earnings of corporate India on the back of continuing, albeit moderating, tailwinds from commodity prices and seasonally strong demand during the recently concluded festive season, it said in a release. Icra's analysis of the second quarter of 2023-24 performance of 601 listed companies (excluding financial sector entities) revealed improved operating profit margins (OPM), increasing by 398 bps and 64 bps on a year-on-year and sequential basis, respectively, it said. This was primarily aided by softening in commodity prices. However, while the input costs softened in recent months, they remain elevated compared to the historic levels, and accordingly, India Inc's OPM is yet to revive to its historic highs, the agency said. "The 1.6 per cent ...

India's core sector output grew by 12.1% in October on low base effect

The figures for September were revised upward to 9.2 per cent from 8.1 per cent earlier

Electric buses to account for 13% of new bus sales by FY25, says ICRA

E-bus penetration has reached 7 per cent in FY2023, it noted

E-buses expected to account for 11-13% of new bus sales by FY25: Icra

Electric buses are expected to account for up to 13 per cent of new bus sales by FY2025, rating agency ICRA said on Monday. Many state Electric Vehicle (EV) policies have announced specific targets and timelines for e-bus adoption, thereby creating a road map for electrification, it noted. With significant operational savings vis--vis conventional diesel buses, ICRA said it expects the demand for e-buses to continue to rise. "ICRA foresees electric buses (e-buses) to be at the forefront of India's electrification drive, with the segment expected to witness healthy traction going forward. ICRA estimates e-buses to account for 1113 per cent of new bus sales by FY2025," it said in a report. According to the report, it expects government subsidies and evolving technologies to play a role in further reducing the capital costs involved in e-buses. The traction in the e-bus segment is already visible over the past couple of years, with e-bus volumes as well as penetration levels improvin

States to miss capex targets this fiscal on fall in revenue, polls : Report

Several states are likely to miss their capital expenditure targets for the ongoing fiscal due to polls and fall in revenue, according to an analysis. A steep fall in revenue receipts will further lead to a major compression in state capex, which during the first half of FY24 rose to a record 35 per cent, Icra Ratings Chief Economist Aditi Nayar said. To maintain their Budget estimates, 21 states -- whose capex and other macro data is available -- will have to ensure that the capex run run rate is maintained at 28 per cent in the second half, which is unlikely, since model code of conduct is likely to take effect in the March quarter before the general elections, Nayar said. The combined revenue and fiscal deficits of these 21 states widened to Rs 70,000 crore and Rs 3.5 lakh crore, respectively, in the April-September period, from Rs 50,000 crore and Rs 2.4 lakh crore, respectively, in the year-ago period. The report excludes Arunachal Pradesh, Assam, Goa, Manipur, Meghalaya, ...

Securitisation in personal loan segment may see temporary pause: ICRA

The sale of personal loan retail pools may see a temporary pause after the RBI's decision to increase the risk weights on unsecured asset classes of banks and non-banking financial companies (NBFCs) by 25 per cent, a report said. The sale of personal loan pools by NBFCs amounted to about Rs 1,150 crore in FY 2023 and had already crossed Rs 800 crore in H1 FY2024 (i.e. 4x of the volumes done in H1 FY2023), Icra said in a statement. Such transactions had picked up momentum, given the growing financing requirements for the NBFCs to meet the strong credit demand for consumer and personal loans in the country, coupled with the growing appetite for personal loan asset class by the banks that were purchasing these loan pools, it said. The rating agency expects the pace of personal loan sell-downs to taper at least in the near term, following the increase in capital requirements on such loans for the purchasing banks, which would, thereby, augment the costs for all parties. While ...

Project cost over doubled to Rs 10.64 trn under Bharatmala Pariyojana: Icra

The project cost under the Bharatmala Pariyojana (BMP) programme has more than doubled to Rs 10.64 lakh crore owing to the steep rise in input costs and an increase in land acquisition costs, rating agency ICRA said on Monday. Bharatmala Pariyojana is the largest highway infrastructure programme in India which aims at the development of 34,800 kilometres of national highway corridors at an investment of Rs 5.35 lakh crore. "Pending the cabinet approval for the revised cost of Bharatmala Phase-l, project awarding activity in the recent quarters took a beating, declining by 48 per cent YoY to 2,595 km during 7mFY2024 compared to 5,007 km during 7mFY2023," it said. The figures are for the first seven months of this fiscal compared to the year-ago period. ICRA said it expects the awarding activity to contract over 30 per cent YoY (Year-on-Year) in FY2024. Giving more insights, ICRA VP & Co-Group Head Ashish Modani said almost 95 per cent of the road awards by the Ministry of Roads ..

Medium & small NBFCs may require debt funding worth Rs 2.2 trn: ICRA

The capital profile of the larger NBFCs has improved after FY 2019 as the growth slowed down