Mumbai, 1 April (IANS). Even after global challenges, the credit ratio of Indian companies has increased to 2.35 times in the second quarter of FY 25, which was 1.62 times in the first quarter of FY 25. This information was given in the report of the CARAM Ratings released on Tuesday.
In addition, the upgrade rate has increased to 14 percent, which was 12 percent in the first half of FY 25. This is due to domestic consumption and increase in government spending.
However, the downgrade rate 200 base points have come down to 6 percent. This is caused by asset quality concerns in NBFCs providing microfinance and unsafe commercial loans, as well as pricing pressures being made by small-sized companies in chemical and iron and steel sectors as well as reduction in exports.
According to Sachin Gupta, Executive Director and Chief Rating Officer of CARAIAGE Ratings, the increase in credit ratio is a proof of the strength of the Indian industry.
He further stated that however, further travel is not easy. The implementation of American tariffs can disrupt the speed of export-operated sectors, as well as starting price competition from other affected economies.
Gupta said that it is not that everything is disappointing, as the trade agreement and the fall in the rupee’s price can provide very important relief to exporters.
The report further stated that there was a strong jump in the credit ratio of careers ratings for the manufacturing and services sector. In the second half of FY 25, it has increased to 2.06, which was 1.21 in the first half of FY 25.
The report further stated that the change in credit ratio shows the strengthening base of business in India amid global challenges.
The credit ratio for the infrastructure sector has improved to 3.94 in the second half of FY 25. However, there has been a decline in the credit ratio of banking, financial services and insurance (BFSI) sector and it has come down to 1.07 in the second half of FY 25, which was 2.75 in the first half of FY 25.
-IANS
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