Ratings

Many would say it was only a matter of time after India’s outlook was upgraded to positive two years ago that a ratings upgrade was in the tow. S&P Global Ratings, last week, delivered the much talked about upgrade after a gap of 17 years, underscoring the strength of the Indian economy. But is it too late and will the next one take as much time. Welcome to Beyond Averages, our weekly data podcast where we try to decode the story behind the big numbers and this week we will be talking about S&P’s upgrade and the road ahead. More than the upgrade, it’s the outlook and forecast for India that seem reassuring. S&P expects Indian economy to weather the global uncertainty storm and grow at 6.8 percent starting FY27. The economy is expected to log a 6.5 percent growth this fiscal as per S&P. Moreover, the ratings agency expect debt to come down to below 80 percent and fiscal deficit to fall to 6.6 percent. But does that take us closer to the next upgrade. Not so much, S&P notes that for the next upgrade deficit needs to fall to 6 percent on a structural basis.

No major impact of US tariffs on India’s growth, says S&P Global Ratings

Exemptions for electronics, especially smartphones, and pharmaceuticals will help cushion the blow, while India’s export exposure to the US is limited to about 2 percent of GDP

Indian ports could benefit from China+1 strategy, says Moody’s Ratings

Besides tariffs, geopolitical events were an additional stress for emerging markets, Moody’s highlighted, pointing to the recent flare up of tensions between India and Pakistan

Fitch affirms India’s rating at 'BBB-' with a stable outlook

Fitch expects Indian economy to expand 7.2 percent in FY25 and projects inflation to cool down to 4.6 percent for the year

India’s digital infrastructure differentiates it from many of its emerging market peers: Moody’s

Moody’s Ratings in a research note has said that India’s infrastructure will help support growth, create jobs and give sectors like consumer goods, transportation a boost.

Deficit targets achievable; sustained fiscal consolidation must for upgrades: Rating agencies

Economists have been contending that the government adhering to fiscal path will lead to a ratings upgrade by one of the three global ratings concerned within the next 18-24 months

Moody’s keeps India’s 2024 growth unchanged at 6.8%

The rating firm predicted Indian economy to grow 6.4% in 2025; inflation to ease to 5.2% in 2024 and 4.8% in 2025

India could grow over 8% if it resolves infra bottlenecks: S&P analyst

Reduction in fiscal deficit will have to be largely driven by the central government. A reduction in fiscal deficit an lead to an upgrade in rating

India’s debt high, but sustainable, NCAER Director General Poonam Gupta says

Debt levels of states are expected to increase further, but will remain sustainable.

India’s external debt ratio falls to 13-year low of 18.7% in FY24

General government debt rose 11.5 percent as of March 2024 compared with the previous year, households and nonprofit institutions serving households declined 16.5 percent.

Motilal Oswal initiates coverage on JSW Infra, sees over 21% upside

JSW Infrastructure's focus on strategic acquisitions, an increasing share of third-party customers, and long-term contracts with JSW Group companies could boost the company's growth prospects going forward, says Motilal Oswal.

Sitharaman says ratings agencies should take note of India's reforms, macro stability

The Indian government has been in a running battle with S&P Global Ratings, Moody's Investors Services, and Fitch Ratings as it thinks the sovereign rating assigned to the country is not a fair reflection of its economic strength.

Tata's Harrier and Safari achieve 5-star safety rating in Global NCAP test

Global NCAP said in the dynamic tests, both models of Tata demonstrated complete protection for child occupants.

Cipla stock rating upgraded to ‘buy’, Motilal Oswal cites multiple growth levers

MOFSL also pegs strong mid-teens PAT and sales CAGR for Cipla over FY23-25, backed by the company's sustained growth across markets.

Fitch retains India's growth forecast for FY24 at 6.3%, flags inflation risks

The Indian economy grew 7.8 per cent in the April-June quarter of current fiscal on strong services sector activity and robust demand.

S&P Global Ratings revises outlook to negative for Vedanta Resources

In a statement, it said Vedanta Resources’ weakened access to cash flow from its operating subsidiaries at a time of challenging external financing conditions has raised its refinancing risk.

ACC’s stellar Q1 earnings fail to excite D-Street, brokerage ratings vary

Although the cement maker’s quarterly earnings have beaten the market estimates, brokerage ratings differ ranging from underweight to buy.

Moody’s expects Oyo’s EBITDA to jump 65% YoY in FY24

During a presentation to employees, Ritesh Agarwal, founder and group CEO of the SoftBank-backed company said Oyo had reported an adjusted EBITDA of around Rs 245 crore in FY23. Rating agency keeps Oyo’s parent company, Oravel Stays Private Ltd’s rating at B3 corporate family rating.

Lower-rated firms see borrowing costs jump 300 bps as RBI rate hikes pinch

Returns on corporate bonds are expected to stay elevated due to strong credit demand, falling liquidity, and rate hikes by the central bank.

Moody's takes positive rating actions on SBI, PNB and two other PSU banks

Outlooks on the long-term ratings of all four banks remain stable.

Credit ratings without lenders' info cannot be used by banks for capital computation: RBI

Reviewing the prudential norms for risk weights for exposures to large corporates and non-banking finance companies, a notification from RBI (Reserve Bank of India) said the new mandatory loan rating disclosures will be effective from March 31, 2023.

Automobile dealers to clock their fastest revenue growth in three fiscals: Report

This will be aided by increasing preference for personal mobility, higher economic activity, easing supply-side constraints, shift in product mix towards higher priced vehicles, and price hikes of 5-7 per cent, Crisil Ratings said in its report.

Moody’s changes Tata Steel's outlook to positive from stable

Ratings agency Moody's Investors Service on June 27 revised the outlook on Tata Steel to ‘positive’ from ‘stable’. At the same time, Moody's also affirmed Tata Steel's Ba1 corporate family rating (CFR).

Pressure on rupee not a concern for India's sovereign rating, says S&P

The rupee has fallen around 3 percent against the dollar in the last couple of weeks. While this weakness could result in a wider current account deficit, S&P does not see the currency as a concern for India's sovereign rating

Moody's places ratings of 51 Russian companies on review for downgrade

The action comes after Moody's placed Russia and Ukraine's ratings on review for downgrade on February 25.