Page 4 - Icra

Engines stalled, planes grounded: ICRA alerts turbulence in Indian aviation

Indian airlines remain grounded by engine problems and labour gaps, with recovery not expected before FY2026, finds credit rating agency ICRA

Borrowers may gain from lower rates under RBI draft co-lending norms: ICRA

RBI has proposed that the blended rate of interest is to be calculated as an average rate of interest derived from the interest rates charged by respective funding regulated entities

Rail sector revenue to grow 5% in FY26, wagon makers drive gains: Icra

The Indian railway sector is expected to see a moderate revenue growth of 5 per cent in FY'26, driven primarily by strong performance from wagon manufacturers, while construction entities in the sector may witness slower growth, an analysis by credit rating agency ICRA said. The report highlights that the weighted average operating margins for the sector will remain healthy at around 12 per cent in FY26, supported by operating leverage benefits and stable input prices. This comes amid sustained government investments in railway infrastructure, with the capital outlay increasing by 130 per cent over the past five years to Rs 2.52 lakh crore in 2025-26 (Budget Estimates), a statement said. However, budgetary support has grown only modestly by 2 per cent between FY2024 and FY2026, indicating a potential slowdown in funding momentum, the rating agency said. Suprio Banerjee, Vice President and Co-Group Head, Corporate Ratings, at ICRA, noted that railway sector entities have been key ..

ICRA expects 18-20% growth for airport operators in FY26 on higher traffic

Indian airport operators are expected to see an 18-20 per cent topline year-on-year growth in this fiscal, driven by a sustained improvement in passenger traffic and tariff hike as well as ramp-up in non-aeronautical revenues, ratings agency ICRA said on Thursday. At the same time, ICRA estimates overall air passenger traffic growing at a healthy 7-9 per cent Y-o-Y to reach at 440-450 million in FY26, on the back of an around 10 per cent estimated increase in the just concluded financial year, it said. The overall passenger traffic (domestic and international) is estimated at 412-415 million in FY25, as per ICRA. The ratings agency said its estimation is based on a sample set of airports, including those managed and operated by the Airports Authority of India (AAI), as well as Delhi, Bangalore, Hyderabad and Cochin International Airports, which operate under the public-private partnership (PPP) model. Also, given the capacity bottleneck faced by a few airports, the sector will ...

RBI's growth outlook is optimistic amid global concerns; see 50bps more cut

We expect the GDP growth to print at 6.2 per cent in FY26, marginally below the 6.3 per cent projected by us for FY25, said Aditi Nayar of Icra

Banks may write off stressed loans worth Rs 1.5 trillion in FY26: Icra

Credit growth to expand at 10.8-10.9% on regulatory easing

Regulatory easing to support 10.8% credit growth in FY26: Icra

The incremental credit is likely to rise 10.8 per cent to Rs 19-20.5 lakh crore in the current fiscal compared to Rs 18 lakh crore or a 10.9 per cent growth in 2024-25, according to rating agency Icra. In a release on the Indian banking sector outlook, the agency said it expects the regulatory easing seen in recent months to support a credit expansion of about 10.8 per cent in FY2026. Such measures include the repo rate cut, deferment of proposed changes in the liquidity coverage ratio (LCR) framework and additional provisions on infra projects, along with the roll-back of increased risk weights on lending to unsecured consumer credit and non-banking financial companies (NBFCs). "Besides this, the durable liquidity infusion by the Reserve Bank of India through open market operations (OMO) by way of purchases of Government bonds and forex swaps with banks, would aid the liquidity and faster transmission of the ongoing cut in policy rates," it said. The persisting challenges in depos

US tariffs not to have any material impact on India's PV exports: ICRA

The automobile sector is not covered in this order since it is already subject to Section 232 tariffs at 25 per cent

Private capex share in economy dipped to decadal low of 33% in FY24: Icra

Domestic rating agency ICRA on Monday said private capital expenditure's share in the overall investments in the economy dipped to a decadal low of 33 per cent in FY24. Among the private companies, it was the unlisted players which were subdued in investments as compared to the listed entities, as per a report. It can be noted that for the last few years, the government has been driving investments, leading to concerns in some quarters over the private sector's absence and its impact on the overall economic activity. The private sector has instead focused on deploying excess cash at reducing loan burdens rather than investing in new facilities, choosing to run at high capacity utilisation. "Weak domestic consumption, especially urban, muted export demand, and the influx of cheap Chinese imports in some sectors, among other factors, restricted the capacity expansion plans of Indian corporates," the agency's chief rating officer K Ravichandran said. Illustrating the importance of ..

Sa-dhan seeks new MFI refinance body, calls for more equity support

Sa-dhan has urged the government to set up a dedicated MFI refinance body and increase flexibility in the India Microfinance Equity Fund to address funding challenges in the microfinance sector

Indian IT services industry to see 4-6% revenue growth in FY26: Icra

IT sector growth is expected to remain subdued in the near term due to global economic headwinds and policy uncertainties in the US and Europe

India's data centre capacity to grow to 2,000-2,100 MW by March 2027: ICRA

India's data centre (DC) operational capacity is expected to increase to 2,000-2,100 MW by March 2027 from around 1,150 MW as of December 2024, on the back of data usage and data localisation initiatives, according to rating agency Icra. Indian data centre players are projected to invest Rs 2-2.3 lakh crore, with a development pipeline of 3-3.5 GW to be delivered over the next 7-10 years. "Driven by AI requirements, the global DC market has already witnessed multiple large deals (>300 MW) signed by hyperscalers and India is expected to follow the trend. This, coupled with favourable regulatory policies and an infrastructure status for the DC sector will support strong growth prospects in India in the coming decade," Anupama Reddy, Vice President and Co-Group Head, Corporate Ratings, Icra said. While cloud, 5G rollout, machine learning and internet of things (IoT) are expected to generate enormous data and storage requirements, GenAI-led high computing requirements present a new .

Domestic passenger vehicle sales expected to grow 4-7% in FY26: Icra

Passenger vehicle sales volume in India is expected to grow at a moderate pace of 4-7 per cent in FY26 with most demand drivers remaining neutral or favourable, according to ratings agency Icra. As for two-wheelers, Icra said it estimates the industry volumes to grow at a healthy pace of 6-9 per cent in FY26, following an estimated 11-14 per cent growth in FY25. Passenger vehicle (PV) industry volumes reached an all-time high of 4.2 million units in FY24. In year-to-date (YTD) FY25, wholesale volumes remained stable led by steady production by automobile manufacturers but the industry volume growth has been modest at about 2 per cent against the backdrop of waning replacement demand and high inventory levels, Icra said in a statement. Healthy retails have helped moderate dealer inventory holding in the past few months. Nonetheless the inventory continues to be moderately high, it added. "The industry's growth in FY2025 is expected at 0-2 per cent. Most of the demand drivers for th

India Inc revenue to grow 7-8% in Q4 on demand revival, govt spend: ICRA

Domestic rating agency ICRA on Monday said Indian companies are likely to clock 7-8 per cent revenue growth during the March quarter of the current fiscal year, led by revival in rural demand and uptick in government spending. ICRA expects the private capital expenditure (capex) cycle to remain measured in view of the uncertainties around geopolitical developments and relatively subdued outlook on merchandise exports from India. Nonetheless, certain sunrise sectors such as electronics, semiconductors and niche segments within the automotive space like electric vehicles (EVs) will continue to see a scale-up in investments, in line with various production-linked incentive programmes announced by the Government of India, it said. In a statement, ICRA said the recovery in the operating profit margins (OPM) for India Inc witnessed over the past quarter is likely to be sustained at 18.2-18.4 per cent, supported by an increase in demand, led by improved consumer sentiments. "Rural demand

Automotive component industry likely to grow 8-10% in FY26, says ICRA

Credit rating agency ICRA forecasts that this growth will be driven by strong export performance, increasing localisation of electric vehicle (EV) components, and rising demand in the aftermarket

Major auto component firms to invest up to Rs 30K cr next fiscal: ICRA

Major auto component firms are likely to invest Rs 25,000-30,000 crore in the next fiscal for capacity expansion and localisation, including electric vehicle (EV) parts, ratings firm ICRA said on Thursday. The sector is also expected to invest in capacity enhancements and upcoming regulatory changes. "ICRA's interaction with large auto component suppliers indicates that the industry is estimated to spend Rs 15,000-20,000 crore in FY2025 and another Rs 25,000-30,000 crore in FY2026," Vinutaa S, Vice President and Sector Head, Corporate Ratings, ICRA Ltd said in a statement. The incremental investments would be made towards new products, product development for committed platforms and development of advanced technology and EV components, apart from capex for capacity enhancements and upcoming regulatory changes, she added. The rating agency said it expects the revenue growth of the Indian auto component industry (represented by a sample of 46 auto ancillaries with aggregate annual ..

Economy projected to grow 6.4% in Q3 as govt spending increases: Icra

ICRA on Tuesday projected India's GDP to grow 6.4 per cent in the December quarter on account of enhanced government spending amid uneven consumption. The Indian economy grew at 6.7 per cent in April-June, but it slowed to a seven-quarter low of 5.4 per cent in September quarter on sluggish government capital expenditure due to general elections and weak consumption demand. ICRA Chief Economist Aditi Nayar said India's economic performance in Q3 FY2025 benefitted from a sharp ramp-up in aggregate government spending (Centre and state) on capital and revenue expenditure, high growth in services exports, a turnaround in merchandise exports, healthy output of major kharif crops etc, which would have buffered rural sentiment. Some consumer-focussed sectors saw a pick-up during the festive season, even as urban consumer sentiment dipped slightly, and other sectors such as mining and electricity saw an improvement after weather-related challenges in the previous quarter. "Overall, while

US tariffs may divert steel shipments to India, affecting local prices

Indian steel market may become a victim of diverted shipments putting pressure on local prices, Icra said after the US administration announced 25 per cent tariff on all steel and aluminium imports. The latest trade measures cut both ways for the domestic steel industry. First, deliveries of 4 MTPA to the US from Asian suppliers like Japan and South Korea, which till now had preferential market access, could be partly bounced-off to high-growth markets like India, Icra said. Icra noted that these two countries rank among the top three steel exporters to India, accounting for 40-55 per cent of India's overall finished and semis (finished) steel imports. Given the duty-free access on account of the free trade agreements (FTA) with India, import pressures from South Korea and Japan could increase in FY2026 as they search for alternate markets. This can exert pressure on domestic steel prices, pulling down the industry's earnings further in FY2026. Unlike South Korea and Japan, China h

Rate cut as expected; FY26 growth forecast slightly optimistic: Aditi Nayar

Looking ahead, we believe that the growth-inflation outlook suggests that there is room for another 25 bps rate cut in either the April or the June 2025 meetings

Union Budget 2025-26: Fiscal deficit broadly in line with expectations

Revenue spending growth of 6.7 per cent is somewhat higher than our forecast