Page 5 - Icra

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

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