India Inc. Financial Health Recovers at Fastest Pace in a Decade
The credit quality of Indian firms is improving at the fastest pace in 10 years, reflecting a sharp recovery after the pandemic.
(Bloomberg) -- The credit quality of Indian companies is improving at the fastest pace in at least a decade, reflecting a sharp recovery in the economy after a slump triggered by the Covid pandemic.
S&P Global Ratings’ local unit Crisil Ltd., recorded a credit ratio -- the number of rating upgrades to downgrades -- of 2.96 in the six months ended Sept. 30, the highest in at least 10 years. Other rating firms also saw credit ratios recovering during the period from the lows reached in the previous year due to the fallout of the coronavirus pandemic.
The rebound in financial health of local firms comes as the Indian economy is showing signs of a bounce back with the services sector resuming expansion and manufacturing activity retaining growth momentum. The local units of Fitch Ratings and Moody’s Investors Service also saw credit ratios of 3.06 and 1.86, respectively, showing the number of upgrades out pacing the number of downgrades.
“The speed of recovery has been remarkable,” said Arvind Rao, a director at Fitch unit, India Ratings. “For manufacturing and service corporates, the improvement in credit profile is from unprecedented deleveraging.”
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