Care Edge Ratings’ Credit Ratio surged to 2.35 times in H2 FY25, up from 1.62 times in the first half, reflecting India Inc.’s resilience amid global challenges. Upgrades rose to 14per cent, driven by domestic consumption and government spending, while downgrades fell to 6per cent, with asset quality concerns affecting NBFCs in microfinance and unsecured loans. Small chemical and steel firms, along with export-driven Cut and Polished Diamond (CPD) players, faced pricing pressures.

Sachin Gupta, Chief Rating Officer, noted that despite US tariffs impacting exports, trade agreements and rupee depreciation could provide relief. Corporate India’s strong balance sheets remain a buffer against volatility. The manufacturing and services sector’s credit ratio improved from 1.21 to 2.06, supported by capital goods, automotive, real estate, hospitality, and healthcare.

Infrastructure saw a credit ratio jump to 3.94, with transport and power leading upgrades due to project completion and timely payments. However, EPC players faced working capital issues. The BFSI sector’s credit ratio declined from 2.75 to 1.07, reflecting stress in microfinance and unsecured loans.

While domestic demand remains strong, global uncertainties and geopolitical risks will shape future credit trends. Register for Care Edge Ratings’ webinar on April 2, 2025, for expert insights.