Page 16 - Icra

Insurance industry's direct premium to cross Rs 3 trn by FY25: Icra

The insurance industry is expected to net gross direct premium income (GDPI) of about Rs 3 lakh crore by FY25 as against Rs 2.4 lakh crore at the end of March 2023, a report said. Private insurers' combined ratio is likely to improve and Return of Equity (RoE) is expected at 11.2-12.8 per cent in FY2024 and 12.5-13.9 per cent in FY2025, ICRA said in a report. Most PSU insurers are expected to witness high combined ratio resulting in net losses, though it will be lower compared to last few years, it said. Moreover, it said, the capital requirement of three PSU general insurers (excluding New India) is estimated at a sizeable Rs 172-175 billion to meet solvency of 1.50 times as of March 2024, assuming 100 per cent forbearance from the regulator. The industry's GDPI grew a sharp 17.2 per cent year-on-year (YoY) in 2022-23 to Rs 2.4 lakh crore with the resumption of economic activity after the waning of Covid-19 infections. In absolute terms, the report said, the incremental growth in

Healthy traffic, pricing to cut down airlines' losses of Rs 50-70 bn: Icra

Indian airline industry is likely to cut down its losses to about Rs 50-70 bn, owing to healthy passenger traffic and ability to shore up their yields, ICRA said in a sectoral report

Domestic commercial vehicle industry expects to grow by 7-10% in FY24: Icra

The domestic commercial vehicle industry volumes are expected to grow by 7-10 per cent in FY2024, supported by replacement demand, pick-up in mining, infrastructure construction activities and overall healthy fleet utilisation levels, rating firm Icra said on Thursday. This is despite the 5 per cent year-on-year and 41 per cent sequential contraction in volumes in April 2023, it noted. The growth in FY2024 would follow a year of healthy demand in FY2023, wherein the industry volumes expanded by more than 33 per cent, supported by a favourable base, as well as a healthy pick-up in macroeconomic activity, Icra said. The scrappage policy, which was announced in March 2021, has been implemented from April 1, 2023, and is likely to contribute to the growth of new commercial vehicle sales, it added. "The major impact of the scrappage policy is expected in the CV (Commercial Vehicle) segment, especially passenger carriers, as the usage of other vehicles such as two-wheelers, passenger ...

ICRA downgrades ratings of Shapoorji Pallonji to BBB+, places it on watch

ICRA has downgraded the ratings of Shapoorji Pallonji and Company to BBB+ from A- and placed it on rating watch with developing implications.

Icra downgrades Shapoorji Pallonji Group flagship's ratings to BBB+

The flagship company of Shapoorji Pallonji Group, the single-largest shareholder in Tata Sons, had its debt downgraded on Thursday by a domestic rating agency. The Rs 19,600-crore debt across multiple instruments of Shapoorji Pallonji and Company Private Limited (SPCPL) has been downgraded to BBB+/A2 from A- (with a stable outlook)/ A2+, and placed on rating watch with developing implication, according to a statement. The delay in securing the requisite working capital limits, which has impacted the engineering, procurement and construction (EPC) operations in FY23, is resulting in modest profitability and muted debt coverage metrics, Icra said. Its line of credit was put to restricted use as a part of the One Time Restructuring (OTR) plan in March 2022, which constrained order execution in FY23, it said, adding timely sanction of adequate working capital limits remains critical to support the growth in core operations in the medium term. The 'Watch with Developing Implications' ..

Icra downgrades SPCPL's rating to BBB+ on delay in securing working capital

The delay has impacted the engineering, procurement, and construction (EPC) operations in FY23, resulting in modest profitability and muted debt coverage metrics compared with earlier estimates

Icra cuts telecom tower industry outlook to negative from stable

Fearing payment delays from key telcos to continue in FY24, domestic rating agency Icra on Tuesday cut its outlook on the telecom towers industry to 'negative' from 'stable'. In a note, the agency said delays in payments by some of the key customers have elongated the receivables cycle for the telecom tower companies to more than 80 days in FY23. The tower industry's dependence on weaker telcos in terms of tenancies remains high at around 34 per cent. Thus, till the time there are liquidity pressures on such customers, the tower industry's health is likely to remain affected, it said. "The elongation in receivables is likely to result in tower companies making sizeable provisions to the tune of Rs 10,000 crore in FY23, thereby denting their profitability," its sector head for corporate ratings Ankit Jain said. The agency expects the provisions to continue going forward, although the quantum is likely to moderate from the FY23 levels, Jain said, adding that increased reliance on ...

April GST collection of Rs 1.87 trn is robust, reasonable, says Icra

According to Jalan, the Central Board of Indirect Taxes and Customs (CBIC) is expected to achieve more, which it has not in April 2023 wherein the growth in GST Collections is exactly 12 per cent

Ratings firm Icra expects tyre sector revenues to grow by 7-9% in FY24

Ratings firm Icra on Thursday said it expects a revenue growth of 7-9 per cent for tyre industry in the current fiscal. The rating agency pegs the domestic tyre demand growth at 6-8 per cent for FY2024, supported by stable growth in the replacement segment and sustained demand momentum in the OEM segment, Icra said in a statement. The rating agency noted that it expects the demand momentum in the OEM (Original Equipment Manufacturer) segment to continue in FY2024 with an estimated growth of 8-10 per cent. Replacement demand, which forms around two-thirds of tyre demand, is likely to witness mid-single digit growth in FY2024, it added. "ICRA projects a 7-9 per cent growth in industry revenues for FY2024 with domestic growth outpacing exports," Icra Assistant Vice President and Sector Head Nithya Debbadi said. Segment-wise, commercial vehicles shall benefit from the increasing traction in the infrastructure and construction segments, she added. Strong underlying demand and preferen

Tata Capital to LIC Housing finance: Companies to raise funds from markets

Punjab & Sind Bank will raise funds through the sale of certificates of deposit maturing in three months

Execution of market reforms key to improve financial viability of PSP: Icra

Timely implementation of market reforms is important to improve the financial viability of pumped storage hydro project (PSP) in the country, an Icra report said on Tuesday. The levellised tariff for pumped storage hydro projects in the base case, assuming a capital cost of Rs 6.5 crore per MW, is estimated at about Rs 5 per unit, and the landed tariff, including the cost of energy required for pumping, is estimated at Rs 9 per unit, said a statement in the Icra report. It explained that while the tariff competitiveness of the storage component for PSPs is modest, the PSPs benefit from a long economic life of 40 years with a very mature and indigenous technology available. PSPs are also estimated to remain cost competitive against the storage cost associated with battery energy storage. "Nonetheless, the timely implementation of market reform measures as highlighted in the guidelines remains important to improve the financial viability of PSPs," stated Girishkumar Kadam, Senior Vic

Icra projects 20-25% growth for quick-service restaurant industry in FY24

India's quick service restaurant industry is likely to witness 20-25 pc growth in the current financial year supported by demand uptick and increasing penetration driven by a rapid expansion of stores. Over the long-term, revenue growth shall be supported by factors like rising QSR penetration levels, a shift from the unorganised to the organised segment with a preference for branded quick service restaurant (QSR) players, given the hygiene and convenience factors (delivery over dine-in), etc, ICRA said. "On the back of a robust industry revenue expansion of around 30-35 per cent in YoY terms estimated for FY2023, ICRA projects growth to moderate somewhat while remaining strong at 20-25 per cent in FY2024 on account of the demand uptick and increasing penetration driven by a rapid expansion of stores," the rating agency said. However, downside risks to the estimates remain from the emergence of any further Covid waves or any material weakening in purchasing power due to a high ...

Domestic aviation sector recovering, passenger traffic 60% higher in FY23

The domestic aviation industry continues to witness recovery with air passenger traffic logging around 60 per growth at 13.60 crore in FY23 annually, ICRA said on Wednesday. Despite this, domestic air passenger traffic remained around 4 per cent below the pre-pandemic (FY20) volume of 14.15 crore, the credit rating agency said. The Indian carriers had flown a total of 8.52 crore passengers on local routes in the year ended March 2022, as per ICRA. Domestic passenger traffic stood at 1.30 crore in March this year, a growth of around 22 per cent from March 2022 volume of 1.06 crore, said Suprio Banerjee, Vice President, ICRA. In FY23, the overall airlines' capacity deployment was higher by 38 per cent as compared to FY22, he said. The airlines' capacity deployment last month was higher by 14 per cent year-on-year and around 7 per cent more than pre-COVID level of March 2019, ICRA said. The domestic passenger load factor of the airlines industry, according to ICRA is estimated at 89

National Fertilisers soars 9% to hit 52-week high on hopes of strong Q4FY23

The average trading volumes on the counter jumped nearly 10-fold, as around 14.35 million equity shares, which represented 3 per cent of total equity of NFL changed hands on the NSE and BSE so far

CNG penetration to rise to 18% by 2027 from 11% in 2022, says Icra

ICRA said that the new gas pricing policy led to CNG prices declining to levels seen nearly a year ago, thereby providing relief to the consumers

Earnings of primary base metal players to remain weak in near-term: Icra

The earnings of primary base metal industry is expected to remain weak in the near-term, mainly on high energy cost and range-bound market rates, according to ICRA. While better coal linkage availability would provide some respite, the margins would remain significantly lower than the levels seen in FY 2021-2022, the ratings agency said in its latest report. ICRA expects the "primary base metal industry's earnings to weaken significantly in FY2023 and remain so in the near-term, owing to stubbornly high energy costs and range-bound metal prices," it said. The list of base metals include aluminium, copper, nickel, tin, lead and zinc. "The operating margins of domestic base metal entities are estimated to weaken significantly by around 10 percentage points in FY23, owing to the double whammy of metal price corrections and elevated coal costs. "Consequently, the operating margin of domestic entities is expected to remain range-bound at 19-20 per cent in FY24," Jayanta Roy, Senior ...

India Inc's credit quality outlook positive for FY24, say Crisil and Icra

Interest rate hikes, global slowdown, stubborn inflation pose risk

Centre to borrow 57.55% of its full-year target in H1FY24: FinMin

The government borrowing programme is scheduled to be completed in 26 weekly tranches of Rs 31,000-39,000 crore each

State govt mkt borrowings up 8% YoY to Rs 7.6 trn with last auction of FY23

14 states, one UT raise Rs 41,200 cr, amount is 67% higher than that indicated for State Government Securities (SGS) for this week in the Q4FY23 auction calendar

ICRA upgrades outlook on infra finance firms to 'positive' from 'stable'

Rating agency cites sector's improved solvency profile, loan book growth and earnings