Page 13 - Icra

NBFC assets to grow 25-30% in FY24-25, caution on unsecured loans: Icra

Non-bank lenders are set to report growth of 25-30 per cent in their Assets Under Management (AUMs) in FY24 and FY25, a domestic rating agency said on Thursday. Icra Ratings, which made the growth estimate for Non-Banking Financial Companies (NBFCs) having AUMs of up to Rs 10,000 crore, said unsecured loans need to be monitored going forward. "High growth in the past and the expected AUM expansion going forward, shall keep the portfolio seasoning at low levels, especially for the long-tail loans, namely affordable housing and secured business loans," it said in a report. Its co-group head for financial sector ratings A M Karthik said the agency assessed the performance of about 105 medium and small NBFCs, accounting for about 14 per cent of the NBFC industry AUM as of March this year. On the asset quality front, the agency said the reported Gross Stage 3 (GS3) of the entities it assessed was manageable at 2.6 per cent in March 2023 as against 4.2 per cent in March 2022. The same i

6 states, 1 UT raise Rs 12,500 cr at bond auction, 16% more than indicated

The union territory of Jammu and Kashmir (J&K) raised Rs 1,100 crore by issuing paper with the longest tenure of 30 years

Automobile dealers flag 'distress' if Diwali sales fail to dazzle

The country's largest passenger car maker Maruti Suzuki India (MSIL) agreed that inventory levels are inching up in some models

12 states, 1 UT raise Rs 25,800 cr at bond auction, 19% more than indicated

Spreads widens between 10-yr State & GOI bonds

New investment demand likely to taper in second half of FY24: ICRA

The report also notes that as many as 628 projects with an anticipated completion cost of Rs 7.7 trillion are scheduled to be completed in H2 FY24

Electric vehicle market set to be on full charge by 2025: ICRA report

The report highlights that the electric twowheeler (e2W) segment has emerged as a frontrunner, accounting for 85-90 per cent of total EV sales in FY23

Uneven monsoon's impact on rural demand a concern: ICRA on auto sector

India's domestic automobile industry is expected to record moderate growth in volumes in FY24, but a sustained recovery in demand sentiments remains to be seen, amid concerns over the impact of an uneven monsoon on rural demand, ratings agency ICRA said on Tuesday. The industry has been on a comeback trail over the past two years, aided by a recovery in economic activities and increased mobility although the pace of revival across the various automotive segments has been somewhat mixed, ICRA said in a statement. The passenger vehicle segment reached all-time high volume levels in FY23, aided by preference for personal mobility and stable semiconductor supplies and the demand sentiments are expected to remain healthy in the segment, 6-9 per cent year-on-year (YoY) growth in FY2024, it added. Similarly, the commercial vehicle industry's overall industry volumes are expected to approach pre-pandemic highs, even as the growth is expected to remain at modest levels in FY24, 2-4 per cent

Domestic tractor sales likely to pick up in the second half of 2023-24

Rating agency ICRA pointed out that the domestic tractor industry volumes remained healthy and represented a 12 percent YoY growth in FY2023, touching an all-time high of 9.45 lakh units

States on course to spend 29% more in capex this fiscal: ICRA report

States are on course to spend 29 per cent more on capital expenditure in the ongoing fiscal, aided by additional central grants and market borrowings, a report said on Tuesday. The increased capex spending will see their debt-level in relation to their gross domestic product rising to 30 per cent from 28.9 per cent in FY23, a report by Icra Ratings said. The combined capital spending of 13 major states will rise 29 per cent this fiscal to Rs 6.2 lakh crore from Rs 4.8 lakh crore in FY23, the report said. However, despite the year-on-year growth, the capex spending is likely to be Rs 50,000 crore lower than the FY24 Budget estimates of Rs 6.7 lakh crore, Icra said. The aggregate fiscal deficit of these states for FY24 is expected to go up by Rs 60,000 crore to Rs 8.3 lakh crore as against the budgeted estimate of Rs 7.7 lakh crore, the ratings agency said. With revenue likely to trail budgeted targets, revenue and fiscal deficits of these states are expected to be Rs 2.1 lakh crore

State borrowing costs to rise in H2 FY24 on hardening of yields: Report

Capital expenditure of 13 major states is expected to grow 29% YoY, says ICRA

Road logistics industry anticipates favourable demand in FY2024: ICRA

Rating agency ICRA on Wednesday said that it anticipates a favourable demand scenario for the road logistics sector in FY2024, aided by stable domestic consumption and investment demand. It said the industry's revenue growth is pegged at 6-9 per cent in FY2024 on an elevated base of FY2023, driven primarily by demand from varied segments like e-commerce, FMCG, retail, chemicals, pharmaceuticals, and industrial goods. "ICRA expects the outlook for the sector to remain stable," it said. According to ICRA, downside risks to the estimates remain from any material tapering of demand due to elevated inflation and interest rates and global supply-demand shifts impacting the Indian economic scenario. The industry debt coverage metrics are expected to ease marginally in FY2024 compared to the FY2023 levels with a likely contraction in operating margins because of inflationary input cost pressures, primarily elevated crude oil prices and debt-funded capital expenditure for vehicle replacemen

Alcohol beverage industry may see margin contraction in FY24: ICRA

The domestic alcohol beverages (alcobev) industry is expected to have revenue growth of 8-10 per cent in 2023-24 but operating margins may contract by 90-140 basis points due to input cost pressure, a report by rating agency ICRA stated. The industry revenues are estimated to grow, helped by volume growth and product mix benefits, the report based on a sample set of domestic alcobev companies said. "Industry operating profit margin (OPM) to contract by ~90-140 basis points in FY24 due to input cost pressure, especially grain prices and packaging materials," it said. The alcobev industry witnessed a strong revival in the last fiscal in FY23 led by a healthy demand across both segments -spirits and beer, after two consecutive pandemic-hit years of FY21 and FY22 "During Q1 FY2024, the spirits industry reported a 13 per cent YoY increase in revenues despite being the lean season for the segment, while the beer industry, despite being the peak season, witnessed a marginal decline of ~1%

Footwear industry likely to register moderate growth of 7-8% in FY24: ICRA

The footwear industry is likely to register a moderate growth of 7-8 per cent in the current fiscal against 28 per cent in FY23, a report by Icra said on Thursday. The industry witnessed a muted revenue growth in the first half of FY24, mainly on account of factors like sluggish volume growth and no significant increase in average selling price, it added. The mass segment faces headwinds, and demand is unlikely to improve significantly in the near term, though sales recovery during the festive and wedding season in H2 FY2024 could "partially offset muted revenue growth in H1". "While some recovery is expected in H2 FY2024, overall revenue growth is likely to moderate sharply to around 7-8 per cent in FY24, with companies focusing on the premium segment expected to perform well," said Icra. On the input side, softening raw material (RM) prices are estimated to support the operating margin (OPM) in H1 FY2024. However, increasing RM prices since August 2023 are likely to impact the .

Domestic demand for non-ferrous metals to grow 9% over two fiscals: ICRA

The domestic demand growth rate for non-ferrous metals is expected to remain healthy at 9 per cent in the next two financial years, according to Icra. The ratings agency also informed that the non-ferrous metal industry's profit margins to remain under pressure amid weak global environment. Aluminium, copper and zinc are some of the non ferrous metals. "The domestic demand growth rate is expected to remain healthy at 9 per cent in the next two fiscals and would sharply outpace the expected rate of global demand growth. Thus, Icra has maintained stable outlook on the sector," the agency said. Jayanta Roy, Senior Vice-President and Group Head, Corporate Sector Ratings, Icra, said the global consumption of non-ferrous metals decelerated during the current calendar year due to sluggish demand conditions, primarily in the developed nations. He further said that while there has been a partial recovery in demand from China compared to the lacklustre performance in the previous calendar y

RBI's rate setting body starts deliberations amid expectation of status quo

RBI Governor Shaktikanta Das-headed Monetary Policy Committee (MPC) started its three-day meeting on Wednesday amid expectations of a status quo on the rate front in its bi-monthly monetary policy review. The policy review will be announced on Friday morning. In case of a status quo, interest rates for retail, as well as corporate borrowers, would remain stable. Experts believe that the Reserve Bank will retain the benchmark rate at 6.5 per cent in view of the elevated inflation and global factors. The Reserve Bank started increasing the policy rate in May 2022 in tranches, in the wake of the Russia-Ukraine war and took it to 6.5 per cent in February this year. Since then, it has kept the rate unchanged in the last three successive bi-monthly monetary policy reviews. "The credit policy this time will most likely continue with the existing rate structure as well as policy stance. Hence, the repo rate will be retained at 6.5 per cent with the stance of withdrawal of accommodation," .

Centre sticks to market borrowing plan for H2FY24; introduces 50-year bond

To borrow Rs 6.55 trillion in second half

India's export of cut, polished diamonds may fall by 22% in FY24: ICRA

India's export of cut and polished diamonds is projected to decline by 22 per cent to USD 17.2 billion in the current fiscal due to weakened demand from the key consuming nations, according to rating agency Icra. In the first five months of the current fiscal, cut and polished diamond exports witnessed a sharp year-on-year decline of 31 per cent following lower export volumes and higher polished diamond prices, it said. Export of cut and polished diamonds has been on a declining trend since the first half of 2022-23, it added. "The export contraction is primarily being driven by weak underlying demand conditions in key consuming nations like the US and Europe due to the inflationary pressures, leading to a shift in spending away from diamonds," Icra Vice President and Sector Head Sakshi Suneja said in a statement. The demand from China, which accounts for 10-15 per cent of the global demand, has also not picked up meaningfully so far, she said. In addition, competition from lab-gr

Private defence companies likely to sell Rs 60,000 crore arms to MoD

In Feb 2018, the MoD established two defence industrial corridors to serve as engines of economic development and growth of defence industrial base in the country

Credit growth to moderate to 13.2 pc in FY24, NPAs to improve further: Icra

Credit growth in the banking system's will moderate to 12.1-13.2 per cent in the current fiscal from 15.4 per cent in the year-ago period, a domestic rating agency said on Thursday. Asset quality improvement will continue, while the Gross Non-Performing Assets (GNPA) ratio is expected to come down to 2.8-3 per cent by March 2024, as against 3.7 per cent at the end of the June quarter, domestic rating agency Icra said. Amid the high growth in unsecured credit, the rating agency said there is nothing much to be concerned about on the front, and the vulnerable retail book remains low and manageable. Icra Co-Group Head Anil Gupta termed the credit growth as "robust", despite the slight moderation from the percentage growth perspective, and added that the agency expects the quantum of credit to also be lower at Rs 16.5-18 lakh crore as against the Rs 18.2 lakh crore in the year-ago period. Banks will chase more deposits this year, and the overall deposit growth for FY24 is expected to c

Healthy loan book growth likely to drive profitability of banks in FY24

Analysts at the agency maintained a positive outlook on the banking sector amid expectation that credit growth in the banking sector in the financial year 2023-24