NEW DELHI: India Ratings and Research (Ind-Ra) has reported a strong corporate credit profile in the first half of FY25, highlighting that 202 issuers received rating upgrades. This surge in upgrades is particularly notable among large corporates and those rated ‘A’ and above, contributing to a low downgrade-to-upgrade (D/U) ratio of 0.31 for the period.
In a statement released on October 1, 2024, Ind-Ra noted that the corporate credit profile has maintained robust performance for the fourth consecutive year.
202 upgrades
During H1 FY25, the ratings of 202 issuers were upgraded, representing 20 per cent of the reviewed portfolio, while 62 issuers faced downgrades.
Arvind Rao, Head of Credit Policy Group at Ind-Ra, indicated that the D/U ratio is expected to moderate slightly in the current fiscal year, compared with 0.37 in FY24.
“We anticipate that issuer rating upgrades will outpace downgrades in the second half of the fiscal year,” Rao added.
The report emphasised that large corporates experienced a significant increase in rating upgrades, while ‘A’ category issuers and above faced notably fewer downgrades.
Positive trend
This positive trend is attributed to robust economic growth, driven by strong domestic consumption, increased rural demand, a continued government focus on capital expenditure (capex), and substantial growth in the services sector.
Ind-Ra’s analysis suggests that the favorable economic environment and proactive measures from both the government and corporate sectors are likely to sustain this upward trajectory in corporate credit ratings throughout the fiscal year.
As India continues to navigate a complex economic landscape, the strong performance of corporate credit ratings underscores the resilience of the corporate sector, setting a positive tone for future investment and economic stability.
