CRISIL’s credit ratio1 (or number of upgrades to downgrades) stood at 1.68 times in the first half of fiscal 2019, compared with 1.88 times and 1.45 times in the first and second halves of fiscal 2018, respectively.
There were 685 upgrades to 408 downgrades in the first half of fiscal 2019.
For the first time in five years, the credit ratio for investment-linked sectors at 2.15 times printed higher than the overall credit ratio. The uptick can be seen in sectors such as steel, construction and industrial machinery that, besides buoyant commodity prices, benefited from the government’s infrastructure spending even as private investments lag.
As for domestic consumption-linked sectors, the demand growth drivers remain strong, but rising interest rates could act as a mild dampener. Export-linked sectors have seen strong growth revival in recent months backed by buoyancy in the global economy and a sliding rupee.
All is not well, however, India Inc. faces a volatile rupee, rising interest rates and an increase in the risk of tariff disputes between major global economies turning into full-blown trade wars.
