Page 5 - Icra

Economic Survey 2025 suggests deregulation as a trigger for higher growth

We broadly concur with the Survey's assessment of a pick-up in rural demand on the back of improved crop output, disinflation, and an uptick in domestic investment activity

Net office leasing may rise 10-11% in FY25 across 6 major cities: Icra

Rating agency ICRA on Thursday said the net absorption of office space across six major cities is likely to rise 10-11 per cent to 590-600 lakh square feet this fiscal year. In a statement, ICRA said that the net leasing of offices across the top six cities (Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai Metropolitan Region (MMR) and Pune) in India is likely to increase by 10-11 per cent to 59-60 million (590-600 lakh) square feet in 2024-25 and witness a further growth of 3-4 per cent in the next fiscal on a high base. Despite an influx of a huge supply of 125-130 million (1,250-1,300 lakh) square feet in 2024-25 and 2025-26, the vacancy levels are expected to remain range-bound at 14.5-14.7 per cent by March 2025 and improve to 14-14.5 per cent by March 2026, supported by resilient absorption trends. Anupama Reddy, Vice President and Co-Group Head, Corporate Ratings, ICRA, said the leasing activity remained firm with net absorption of around 54 million square feet in 2023-24 and

Execution of road projects dips 6% in first 8 months of FY25: ICRA report

The ratings agency has attributed the slowdown to the general elections in the first quarter of FY25 (Q1 FY25) and prolonged monsoon in certain geographies

Govt should aim Rs 11 trn capex, give relief to taxpayers in Budget: ICRA

The government should target a capital spending of Rs 11 lakh crore in the Budget for the next fiscal while giving inflation-adjusted relief on personal income tax to boost consumer spending, rating agency ICRA said on Wednesday. ICRA Chief Economist Aditi Nayar said last year's record budgeted capital expenditure of Rs 11.11 lakh crore is likely to fall short by about Rs 1.4 lakh crore and the next year's target should be fixed at the last year's level with a focus on keeping borrowing within reasonable limits. Further, Nayar said capex numbers are trailing the run rate required to get to the Budget target in the current fiscal. Between April and November 2024, capex spending stood at Rs 5.13 lakh crore, 46 per cent of the Budget estimates of Rs 11.11 lakh crore. "We are looking at a large shortfall in the current fiscal. For next year, we are hoping that we will get fiscal space to prioritise capex... For FY26, based on the revenue numbers...a fiscal deficit of 4.5 per cent of GD

Domestic aviation sector likely to clock Rs 2k-3k cr net loss in FY25: ICRA

The country's civil aviation industry is projected to report a net loss of Rs 2,000 to Rs 3,000 crore in the current and next financial year as supply chain challenges and engine issues are expected to continue for some more time, according to a report. In the report on Tuesday, rating agency Icra also said that domestic air passenger traffic was estimated at 153 lakh in December, 7.3 per cent higher compared to 142.5 lakh recorded in November last year. "Further, it grew by ~10.8 per cent on a YoY basis and was higher by ~17.5 per cent than the pre-Covid levels, i.e., December 2019. The airlines' capacity deployment in December 2024 was higher than December 2023 by ~7.5 per cent and by ~3.8 per cent over November 2024," it added. Giving a stable outlook for the Indian aviation industry, Icra said there are expectations of moderate growth in domestic air passenger traffic and a relatively stable cost environment in FY25. Moreover, the industry witnessed improved pricing power durin

Small Finance Banks' bottom-line to take hit on rising fund, credit costs

Manushree Saggar, Sector Head - Financial Sector Ratings, ICRA said the profitability for the SFBs to remain under pressure in H2 FY2025

Construction companies may witness slower revenue growth for FY25: ICRA

The credit ratings agency is expecting the execution pace of the Indian construction entities to pick in H2 FY2025

Securitisation volumes top Rs 68,000 crore in Q3 FY25, says ICRA

ICRA estimates say private sector banks account for Rs 25,000 cr, NBFCs for remaining Rs 43,000 cr

Banking credit growth to remain subdued around 10% for FY26: ICRA

Credit growth may ease to 9.7-10.3 per cent in FY26, weighed down by the persisting high CD ratio and implementation of the proposed changes in the liquidity coverage ratio (LCR) framework, ICRA said in a report. ICRA has revised its credit growth estimate downwards to 10.5-11 per cent for FY25 from its earlier estimate of 11.6-12.5 per cent. In its recent report, ICRA highlighted that with the banks focusing on reducing their credit-to-deposit (CD) ratio and reducing their exposures to unsecured retail and non-banking financial companies (NBFCs), the overall credit growth has moderated in the past few months, it said. Consequently, credit and deposit growth has almost aligned with each other and ICRA expects the trend to continue, the rating agency said in the report. The persisting high interest rates and the slowdown in credit growth, especially towards high-yielding advances will impact the margins of the banking sector, it said. The capital ratios of several banks remain ...

Indian IT sector to grow in mid single digit for FY25: ICRA Report

The hiring target of the industry is also expected to be in the low range

Capacity utilisation of domestic steel may hit 4-year low in FY25: ICRA

Following the post-Covid metals rally, the domestic steel industry was able to achieve the "impossible trinity" of maintaining above 80 per cent capacity utilisation rates

NBFC-MFIs' asset growth to moderate at 5% in FY25 on stricter norms: ICRA

Stricter lending norms adopted in face of slew of concerns will restrict asset growth OF NBFC-MFIs to 5 per cent in FY25, a report by Icra said on Thursday. Icra has assigned a negative outlook on the sector, given the significant near-term headwinds on growth, asset quality and profitability. The last two years had seen a robust expansion in assets under management for non-banking finance companies-microfinance institutions (NBFC-MFIs) but the same is set to moderate to 0-5 per cent in FY25, the report said. The agency attributed the fall in growth to challenges stemming from borrower over-leveraging, socio-political disruptions, and employee attrition-led operational challenges. The sharp increase in the overall overdue book in H1 FY2025 also poses a significant downside risks to the near-term loan quality of the sector, it said. The credit costs will increase to 5.4-5.6 per cent from 2.2 per cent in FY24 for NBFC-MFI entities, the agency said, adding that this, along with a ..

Domestic air traffic to rise 7-10% to 164-170 million in FY25: ICRA

Domestic air traffic is projected to rise 7-10 per cent to 164-170 million in the current fiscal year, while the aviation industry's loss is pegged at Rs 2,000-3,000 crore during the same period, according to rating agency Icra. In the first half of 2024-25, Icra said domestic air passenger traffic stood at 79.3 million, marking a 5.3 per cent annual growth that was partly impacted by the severe heat wave and other weather-related disruptions. The international passenger traffic growth for Indian carriers increased and stood at 16.2 per cent in the first half of the current financial year. On Tuesday, the rating agency said domestic air traffic is expected to jump 7-10 per cent on an annual basis to 164-170 million in FY2025. Icra maintained a 'stable' outlook on the Indian aviation industry, amidst continued growth in domestic and international air passenger traffic. Kinjal Shah, Senior Vice President & Co-Group Head at Icra, said the industry is expected to report a net loss of

Sequential revenue growth for India Inc in Q3 on rise in rural demand: ICRA

Rating agency ICRA on Monday said it expects sequential revenue growth for India Inc in the December quarter, led by improved rural demand and uptick in government spending, additionally supported by the festival season. However, headwinds such as uneven urban demand and evolving global uncertainties could weigh on growth in the second half of the fiscal, it said. On balance, ICRA said it expects the operating profit margin (OPM) for India Inc to improve in the coming quarters. As a result, the credit metrics of India Inc in the October-December period of FY25 are estimated to improve with the interest coverage ratio in the range of 4.5-5 times, against 4.1 times in Q2 FY25, the agency said. Commenting on the trends, Kinjal Shah, Senior Vice President and Co-Group Head -- Corporate Ratings, ICRA -- said while corporate India witnessed a muted sequential revenue growth in Q2 FY2025, led by the ongoing slowdown in urban demand, lower government spending amid monsoon-related disruptio

GDP growth likely bottomed out; inflation to prevent December RBI rate cut

The CPI inflation for Q3 FY2025 is expected to overshoot the MPC's estimate of 4.8 per cent for the quarter by at least 60-70 bps

Icra revises down growth forecast for cement industry to 4-5% for FY25

Rating agency Icra has revised down its volume growth forecast for the cement industry to 4-5 per cent at 445-450 million tonne for the current fiscal on account of sluggish construction activity. In July this year, Icra had forecast a year-on-year volume growth of 7-8 per cent, expecting a better pick-up in demand in the second half. However, Icra has now revised its projection "on account of slower-than-expected ramp-up in construction activity across the housing and infrastructure sectors, post the General Elections," a statement said. Besides, on a YoY basis, the operating profit margins declined by 375 basis points to 12 per cent in Q2 FY2025 and by 192 bps to 14 per cent in H1 FY2025 as prices remained under pressure due to muted demand and oversupply. In the first half of FY25 all-India cement volumes witnessed a muted rise of 2 per cent YoY to 212 million tonne on account of the slowdown in construction activity in Q1 during the elections, followed by the ample monsoon ...

ICRA Analytics ventures into Indian cybersecurity market with Bitsight

ICRA Analytics Limited (ICRA Analytics), a wholly-owned subsidiary of ICRA Ltd, has announced its foray into the USD 3-5 billion Indian cyber security market through a collaboration with Bitsight, a leading global cyber risk management firm and a Moody's partner. This partnership will enable ICRA Analytics to offer cutting-edge cyber risk management solutions to clients across India, the company said. "The Indian cyber security market is estimated to be valued at approximately USD 3-5 billion and is expected to grow at a CAGR of 13-15 per cent over the next five years. ICRA Analytics expects this foray to support its business growth in the future," ICRA Analytics MD & CEO Jayanta Chatterjee told PTI. "Our collaboration with Bitsight will enable us to deliver next-generation cyber risk solutions across India. This strengthens our bouquet of offerings under the risk management platform and ensures access to superior quality cyber risk management frameworks for our clients," he said

GDP growth likely to slip to 6.5%, FY25 growth estimate at 7%: ICRA

Domestic rating agency Icra on Wednesday said India's real GDP growth for the September quarter is likely to decline to 6.5 per cent due to heavy rains and weaker corporate performance. The agency, however, maintained its FY25 growth estimate at 7 per cent on expectations of a pick up in economic activity in the second half of the fiscal. The estimates and commentary on the outlook come at a time when there are concerns around the growth slowdown on a slew of factors like slowing down urban demand. The RBI is sticking to its estimate of 7.2 per cent growth for the fiscal, but a majority of watchers expect it to be under the 7 per cent figure and many have been revising down in the last few weeks. Official data for the Q2 economic activity is expected to be published on November 30. In Q1, the GDP expansion had come at 6.7 per cent. Icra said the dip in Q2 will be due to factors like heavy rains and weak corporate margins. "While government spending and kharif sowing have shown ..

India's renewable energy capacity to touch 250 GW mark by March 2026: Icra

Domestic renewable energy capacity is expected to reach the 250 GW level by March 2026, Icra said on Tuesday. The capacity addition will be driven by the large project pipeline of over 80 GW, following the significant improvement in tendering activity in FY2024, the rating agency said. In a note, Icra said it expects the installed renewable energy capacity, including large hydro projects, in India to increase to about 250 GW by March 2026 from the level of 201 GW as of September 2024. "We expect the rooftop solar segment and the commercial & industrial (C&I) segments to contribute significantly to the capacity addition. Nevertheless, challenges remain on the execution front with respect to delays in land acquisition and transmission connectivity, which, if sustained, could hamper the sector's prospects," Girishkumar Kadam, Senior Vice President & Co-Group Head - Corporate Ratings at Icra, said. ICRA expects the energy storage capacity requirement at 50 GW by 2030, which ...

Icra cuts PV factory dispatch outlook down to 0-2% on high inventory level

Rating agency Icra on Monday revised downwards the outlook for passenger vehicle factory dispatches to showrooms in the current fiscal on acccount of high inventory levels. Despite good retail sales, a year-on-year growth of 6 per cent in April-October FY2025 partially on account of an early festive season, the high inventory levels for the industry curtailed wholesale volume growth, as per a report on the domestic automotive industry by the domestic ratings agency. "ICRA has thus revised the outlook for the wholesale volume growth for the industry in FY2025 downwards to 0-2 per cent," it added. The rating agency had earlier pegged PV wholesale growth at 3-6 per cent for 2024-25 fiscal. Retail sales of passenger vehicles during the festive season grew at a moderate pace of 6 per cent year-on-year to 6.5 lakh units, aided by attractive discounts and competitive financing rates. ICRA also revised the outlook for the wholesale volume growth for the industry to 11-14 per cent in FY202