Page 4 - India Ratings

Headwinds to more than halve H2 growth to 4-4.5%: India Ratings

The many rising headwinds, both domestic as well as external, will more than halve the GDP growth to 4-4.5 per cent in the second half of FY2023, shaving off the better numbers in the first half, says a report. In the first half of the current fiscal, the economy has grown at 9.7 per cent -- 6.3 per cent in the September quarter and 13.5 per cent in the previous three months, and forecasts for the full year vary from a low of 6.6 per cent to 7 per cent. According to India Ratings, the economic recovery in H1FY23 was resilient and encouraging, but challenges such as high inflation and weak demand (both domestic as well as external) are expected to pull down the economic growth to 4-4.5 per cent in H2FY23 from 9.7 per cent in the first half of the fiscal. The agency however did not offer a full-year forecast.September quarter data indicate that despite the geopolitical uncertainty and fear of a global slowdown, the domestic economy has shown resilience. In fact, the Q2 growth print ..

Listed firms managing liquidity challenges well, says India Ratings

Given the tightening liquidity conditions and higher cost of borrowings, corporates with a weak credit profile are likely to tap a loan against shares facility to meet their funding requirements

Sebi cancels certificate of registration granted to Brickwork Ratings

Orders it to wind down operations in six months

India Ratings upgrades non-bank lenders' outlook to neutral from improving

Domestic rating agency India Ratings on Tuesday upgraded its outlook on the non-bank lenders to "neutral" from "improving" on better collection efficiencies and asset growth in the sector. It, however, said that liability management is key for managing margins and loan growth for non-bank finance companies (NBFCs) and housing finance companies (HFCs). The agency said that with the onset of normalcy in lending, the on-balance sheet liquidity would also normalise, negating the impact of the rising cost of funds, thereby protecting margins to a certain extent. In the mid-year outlook on the sector, it said that a lower credit cost for 2HFY23 would aid profitability during the fiscal. Higher inflationary pressure on borrowers and interest rates may deter demand normalisation in the near term but the festive season demand could support the baseline credit offtake, it said. On the securitisation front, a major source of balance sheet management for lenders, the agency said it has witnes

India Ratings revises FY23 bank credit growth estimates to 13% from 10%

The pressure on hiking interest rates on deposits is likely to intensify. However, the decline in credit could offset an increase in deposit costs

Current account deficit expected to reach 3.4% in Apr-June: India Ratings

India Ratings expects the current account deficit to hit a 36-quarter high of 3.4 per cent of GDP or USD 28.4 billion in the June quarter, against a 0.9 per cent surplus a year ago. In the March 2022 quarter, the deficit was a moderate 1.5 per cent or USD 13.4 billion, while in Q1FY22 the current account surplus was USD 6.6 billion or 0.9 per cent of GDP when the country was hit by the second wave of the pandemic, according to the agency. As a share of GDP, the current account deficit is expected to jump to a 36-quarter high after the 1QFY14 when it was 4.7 per cent. In absolute terms, it will be at a 38-quarter high after 3QFY13 when the deficit was USD 31.8 billion, India Ratings said in a note on Monday. Although merchandise exports touched a record high of USD 121.2 billion in Q1FY23, outward shipments are likely to slow down and come in at USD104.2 billion in Q2FY23, growing by a meagre 1.4 per cent in Q2 due to global headwinds. The International Monetary Fund in July slashed

India Ratings cuts India's FY23 GDP growth forecast to 6.9% from 7%

India Ratings projects GDP growth of 7.2 percent in July-September FY23 quarter, 4 percent in October-December and 4.1 percent in February-March

Dwindling wage growth emerging as bigger worry, says Ind-Ra report

Even as the economic recovery gains momentum, dwindling wage growth is emerging as a bigger worry as this leads to tepid demand and resultant under-utilisation of capacity, further elongating the already-large output gap, according to a report. The households, which account for 44-45 per cent of the GVA, have witnessed their nominal wage growth declining to 5.7 per cent during FY17-FY21 from a high of 8.2 per cent during FY12-16. This means wage growth in real terms is close to just about 1 per cent, India Ratings said in a note on Thursday. This is in spite of the overall economy growing at 13.5 per cent, much lower than consensus estimates, in the first quarter of the current fiscal. Even the recent trend in wage growth at the rural and urban levels alludes to an erosion of the purchasing power of households. At the nominal level, wage growth in urban and rural areas was 2.8 per cent and 5.5 per cent year-on-year, respectively, but in real terms, which means adjusted for inflation

Moody's retains India rating and outlook, days after cutting GDP forecast

Says credit profile reflects strengths like large and diversified economy, but warns that country is highly exposed to climate change events

HDFC Bank, SBI AT-1 rates set to influence pricing of other issuances

The bonds will have a call option from the fifth year onwards and are rated AA+ by CRISIL, CARE and India Ratings, sources said

Public sector contributes 20% to national income, 40% of total wages

The public sector contributes only 20 per cent to the national income, but accounts for nearly 40 per cent of the total wages, a report by a domestic ratings agency said on Monday. The average share of the public sector in gross value addition for the ten years ending FY21 is 19.2 per cent but the share in wages is 39.2 per cent, India Ratings and Research said in an analysis based on gross value added (GVA) data released by the National Statistical Office. The share of the private sector in GVA and wages is "more evenly balanced", the agency said, pointing out that it accounts for 35.2 per cent of the wages while its contribution to GVA is 36.3 per cent for the same period. It can be noted that those pressing for a lesser role of the state in the economy, often point out to the lack of efficiency in the public sector. The agency's report said nominal wages grew at a compounded annual growth rate (CAGR) of 10.4 per cent, while return on capital grew at a CAGR of 8.8 per cent during

Fitch revises outlook on domestic lenders to 'Stable', affirms IDRs

Action follows upgrade in outlook on India's Sovereign rating

GST hasn't boosted states' tax collections, no gains seen in 5 yrs: Ind Ra

From June this year, the Centre will stop giving states any compensation for tax collection shortfall.

Lenders to get 10-15 bps margin gains from rate hike, says report

India Ratings said the market rates had already been moving higher before the move

Medium-term credit growth set for headwinds, predicts India Ratings

Capex revival could get delayed as companies await clarity on the macroeconomic front, says agency.

Dip in demand for Covid medicines takes a toll on drug sales in March

Covid related drugs contributed 40% of the pharma market last year

Bond trade gains of banks may be down 30%, says India Ratings

The rating agency's assessment showed the yield on benchmark 10-year government bonds rose 66 basis points in FY22 to close at 6.84 per cent from 6.18 per cent at the end of March 2021

India Ratings revise its FY23 GDP growth forecast downwards to 7-7.2%

Ratings agency India Ratings and Research (Ind-Ra) on Wednesday revised India's FY23 forecast downwards to 7-7.2 per cent.

India Ratings revises auto sector outlook to 'neutral' for FY23

Domestic automobile sales volume is expected to grow 5-9 per cent year-on-year in 2022-23, after three consecutive years of decline, and is likely to fall 5-8 per cent in 2021-22: India Ratings

GDP advance estimates may be cut to 8.6%, says India Ratings

India Ratings said that according to the revised estimates, the GDP growth in FY20 now stands at 3.7 per cent compared to 4 per cent earlier.