Page 14 - Icra

IT firms' growth in Q1 FY24 lowest in 10 qtrs, slowdown to get worse: ICRA

Order book and deal pipeline of most companies remain strong, says ratings agency

IT services sector's revenue growth to slow down to 3% in FY24: ICRA

Indian IT services sector's revenue growth will slow down to 3 per cent in the current fiscal from 9.2 per cent in the previous financial year, a domestic ratings company said on Tuesday. Icra Ratings said the profitability will also take a beating in this financial year and the operating profit margin will narrow by up to 1 percentage point to 20-21 per cent. The topline growth will come down to 3-5 per cent in FY24 from the 9.2 per cent posted in FY23, the agency said, attributing the slowdown to softening demand. The agency's sector head Deepak Jotwani said there has been "persistent uncertainty" in the key markets for IT companies which has resulted in pauses and deferral of non-critical projects and slowdown in discretionary IT spends by key sectors like banking, financial services and insurance, retail, technology and communication. As per industry lobby Nasscom, the sector directly employs over 50 lakh people while analysts say it was crucial for the post-pandemic recovery o

ICRA estimates GDP growth at 8.5% in Q1, maintains FY24 forecast at 6%

India's economic growth will accelerate to 8.5 per cent in the April-June period of the current fiscal from the 6.1 per cent growth rate witnessed in the preceding January-March quarter, Icra Ratings said in a report on Tuesday. The rating agency attributed the faster growth to a supportive base and also a recovery in the services sector. Though its estimate is higher than the RBI's forecast of 8.1 per cent, Icra's chief economist Aditi Nayar said the second half of the fiscal is likely to witness headwinds, which will prove a dampener. Nayar said erratic rainfall, narrowing differentials with year-ago commodity prices, and possible slowdown in momentum of government capex "as we approach the Parliamentary elections will limit the growth", and maintained her 6 per cent real GDP growth estimate for FY24 which is lower than RBI's 6.5 per cent. In the first quarter, unseasonal heavy rains, lagged effect of the monetary tightening and weak external demand exerted a downward pressure on

Corporate hospitals to see 8-10% revenue growth in FY24: ICRA Ratings

Corporate hospitals are set to clock an 8-10 per cent revenue growth and strong margins in the current fiscal, ICRA Ratings said in a report on Thursday. The rating agency maintained a stable outlook for the sector, saying the improving operating leverage, coupled with continued cost optimisation and digitisation measures, are expected to support a healthy operating margins of 22-23 per cent in 2023-24 (FY24). The report is based on the agency's sample of nine listed hospital chains -- Apollo Hospitals, Aster DM Healthcare, Fortis Healthcare, Healthcare Global Enterprises, Krishna Institute of Medical Sciences, Max Healthcare, Narayana Hrudayalaya, Rainbow Children's Medicare and Shalby Hospital. Higher revenue and margin expectations are led by rising incidence of non-communicable lifestyle diseases, growing per capita spend on healthcare, increasing number of health insurances being availed of, and an increase in medical tourism, it said. The report said the aggregate occupancy

Hospital revenues to grow 8-10% in FY24 on rise in lifestyle disease: ICRA

The rating agency expects the aggregate occupancy for its hospital industry's sample set to remain strong at 60-65 per cent in FY24, building on the prior year's 65.1 per cent

Telecom service industry to see revenue growth up by 7-9% in FY24: ICRA

The telecom services industry is expected to post moderate revenue growth of 7-9 per cent in FY 24, due to muted average revenue per user (ARPU) expansion in the absence of tariff hikes in the near-term, ICRA said. ICRA believes that the ongoing 5G roll-out entails densification of the network and sizable deployment of fibre, which is likely to increase the capex intensity in the near to medium term. This would keep debt levels elevated at around Rs 6.1-6.2 lakh crore as on March 2024 (as against Rs 6.3 lakh crore as on March 31, 2023). "ICRA expects the telecom services industry to report moderate revenue growth of around 7-9 per cent in FY2024 over FY2023, owing to muted average revenue per user (ARPU) expansion in the absence of tariff hikes in the near-term," ICRA said in a release.

Telecom sector to see 7-9% revenue growth, Rs 70,000 cr capex in FY24: ICRA

The telecom services industry is expected to post moderate revenue growth of 7-9 per cent in FY 24, due to muted average revenue per user (ARPU) expansion in the absence of tariff hikes in the near-term, ICRA said. The industry has been "upfronting" 5G capex (capital expenditure) and ICRA foresees sectoral capex at around Rs 70,000 crore for FY2024, within an overall spend of around Rs 3 lakh crore over the next 4-5 years. ICRA believes that the ongoing 5G roll-out entails densification of the network and sizable deployment of fibre, which is likely to increase the capex intensity in the near to medium term. This would keep debt levels elevated at around Rs 6.1-6.2 lakh crore as on March 2024 (as against Rs 6.3 lakh crore as on March 31, 2023). "ICRA expects the telecom services industry to report moderate revenue growth of around 7-9 per cent in FY2024 over FY2023, owing to muted average revenue per user (ARPU) expansion in the absence of tariff hikes in the near-term," ICRA said

RBI repo rate cut possible only in Jul-Sep quarter next year: Icra

Domestic ratings agency Icra on Monday said it expects a rate cut by the Reserve Bank to happen only in the July-September quarter next year. The overall cuts in the cycle will be a "shallow" 0.50-0.75 per cent, the agency said. A rate hike by RBI is possible only if the headline inflation is at over 6 per cent for two consecutive quarters, the agency said. "The MPC's (Monetary Policy Committee) latest forecasts suggest inflation will remain above 5 per cent through Q1 FY2025, based on which we have pushed out our forecast for the earliest cut to Q2 FY2025," the agency said. The official data released on Monday said consumer price inflation (CPI) spiked to a 15-month high of 7.4 per cent for July. "The data for food prices for early August 2023 is not very promising, and we expect the headline CPI inflation to print above the 6.5 per cent mark in August, before cooling off materially in September," its chief economist Aditi Nayar said. She attributed the much sharper than expecte

Indian airlines expected to report net loss of Rs 5,000-7,000 cr in FY24

Indian airlines are expected to see a sharp drop in net losses to Rs 5,000-7,000 crore this fiscal as they continue to witness healthy passenger traffic growth and improvement in their revenue, rating agency ICRA said on Thursday. The net loss would be much lower compared to the Rs 11,000-13,000 crore loss the industry is estimated to have reported for 2022-23 due to elevated aviation turbine fuel prices, coupled with depreciation of the rupee against the US dollar, it said. The airlines have improved the cost of available seat kilometre to the cost of available seat kilometre (RASK-CASK) spread through better pricing discipline, it said. According to the rating agency, the domestic aviation industry continues to face challenges despite witnessing a healthy recovery in air passenger traffic because of sequential increase in aviation turbine fuel (ATF) prices and depreciation of the value of rupee against the US Dollar. It said domestic air passenger traffic rose 26 per cent to arou

10% incremental CRR temporary, will drain out Rs 1 trn from system: RBI

Short-term rates on money market instruments like call money rates, treasury bills and commercial paper are likely to increase by 15-20 bps in the near term: ICRA

Icra Ratings logs 88% growth at Rs 41 crore in April-June quarter

Revenue during the quarter rose 11 per cent on-year to Rs 102.7 crore

GE Power gets LoI for contact worth of Rs 444 crore; stock surges 13%

Thus far in the financial year 2023-24, the stock has outperformed the market by zooming 82 per cent as against 12 per cent rise in the S&P BSE Sensex

Indian pharma to grow at 7-9% in FY24 despite regulatory risks: ICRA

ICRA's sample set includes companies such as Dr Reddy's Laboratories, Sun Pharmaceutical Industries, Cipla and Abbott

Revenue of top domestic pharmaceutical firms to grow by 7-9% in FY24: Icra

Revenue of top domestic pharmaceutical companies is likely to grow by 7-9 per cent in the current fiscal, according to rating agency Icra. The growth will be supported by an 8-10 per cent expansion in the domestic market and a 6-8 per cent rise in the US market, while revenues from the European and emerging markets are expected to increase by 3-5 per cent and 8-10 per cent, respectively, it noted. Icra said it has taken into account a sample set of 25 Indian drug firms, which constitute 60 per cent of the overall domestic industry. The segment reported a growth of 10 per cent in the 2022-23 fiscal. Icra said that a continued focus on complex generics/speciality launches in the US market is expected to support industry margins in FY2024. The overall credit profile of Indian pharmaceutical companies is expected to remain healthy, supported by their stable earnings profile, comfortable leverage and coverage metrics, and strong liquidity position, it added. "The 8-10 per cent growth

Retail loans given by NBFCs to grow 18-20% in FY24, says Icra report

Digitalisation and cross-selling shaping high growth in unsecured loans, it says

Expect premium hotel occupancy in India to be at decadal-high of 72%: Icra

Premium hotel occupancy in India is estimated to be at a decadal-high of 70-72 per cent with average room rates expected around Rs 6,000 to Rs 6,200 in FY24, ratings agency ICRA said on Wednesday. Consistent improvement in consumer sentiments despite the inflationary environment, stable corporate performance, and domestic air passenger traffic inching above pre-Covid levels augur well for travel and hotel demand, ICRA said in a statement. The ratings agency said it "estimates pan-India premium hotel occupancy at around 70-72 per cent in FY2024, after recovering to 68-70 per cent in FY2023." Pan-India premium hotel average room rates (ARRs) are expected to be at Rs 6,000 to Rs 6,200 in FY2024, it added. "While the occupancy is expected to be at decadal highs, the RevPAR (Revenue per available room) is expected to remain at a 20-25 per cent discount to the FY2008 peak," ICRA said. ICRA Ltd Vice President and Sector Head Corporate Ratings, Vinutaa S said gateway cities like Delhi an

Tyre demand in India to grow by 6-8% in FY24, says Icra report

Stable input prices to help industry's margins, says the agency

Securitisation volumes surge 60% YoY at Rs 53,000 crore in first quarter

Securitisation involves pooling of loans and selling them to a special purpose entity, so that a lender gets liquidity upfront on the assets it has originated

Coal production increased in big way from FY22-FY23; supply improved: Icra

India's coal production picked up in "a big way" during FY22 and FY23 resulting into improved availability and supply of the dry fuel, on account of various government initiatives towards the sector, Icra said. The production of Coal India grew by 12.1 per cent in FY23, the ratings agency said, adding it was the fastest growth rate registered by the state-owned miner in the past few decades. Besides enhancing output and supply, the government implemented multiple reforms to bring in greater transparency, improvement in ease of doing business, and investment attractiveness in the domestic coal and mining sectors, Jayanta Roy, Senior Vice President & Group Head Corporate Ratings, Icra, said. The government has taken various initiatives since January 2015. The policy interventions, especially with regard to the both captive and commercial coal mining have ushered in greater transparency and ease of doing business in the coal sector, he said in the Icra note. "Domestic coal ...

Cement industry production to grow 7-8%: Icra gives 'stable' outlook

The domestic cement industry is expected to have a volumetric growth of 7-8 per cent in FY24, helped by a rise in demand from the housing and infrastructure sector, a report by ICRA said on Monday, giving a 'stable' outlook for the sector. Besides, the softening of input costs would help the cement industry to improve its operating profits before interest, tax, depreciation and amortisation by 14-18 per cent Year-on-Year (YoY) to Rs 900-950 per MT in FY24, it added. Moreover, supported by healthy demand prospects, the capacity addition in the cement industry is estimated at 63-69 million metric tonnes (MT) between FY24 and FY25. In this, a capacity worth around 33-36 million MT will be added in FY24 and around 30-33 million MT in FY25. "The cement capacity is expected to rise by 6 per cent in FY2024, the highest addition in the last five years," it said. ICRA has given a "stable" outlook for the cement sector. Steady demand from the housing and infrastructure sectors along with a