CRISIL

According to CRISIL Ratings the corporate credit ratio (upgrades vs downgrades) continues to be high -- at 5.52 times in the first half of this fiscal (H1-FY23) -- underscoring ongoing broad-based improvement in India Inc's credit quality. The credit ratio was 5.04 times in the second half of the last fiscal (H2-FY22).

The rating agency also said that securitisation can be an attractive investment avenue for banks looking to grow their retail assets. As the macro-situation and interest rates stabilise, deals may pick up further, propelling the securitisation market volume to reach near pre-pandemic highs. Securitisation transactions touched highs of Rs.1.9 lakh crore in fiscals 2019 and 2020 before the pandemic put brakes on its momentum.

The majority of Budget 2022-23 massive Capex outlay -- Rs 7.50 lakh crore -- will be spent on infrastructure development. Besides, the budget steered clear from a definitive consumption push to support economic recovery. Instead, it batted for investment spend, with an eye on the medium term. "On the one hand, the lift in the consumption cycle is now tied to a broad-based pick-up in economic activity, which the government is trying to engineer through a focus on investments," it said.

The agency had earlier expected the full recovery to happen in fiscal 2023. It said that a material impact on the credit quality of airport operators, however, is unlikely as the dip in revenue is expected to be limited by a likely strong rebound, and the operators have adequate debt servicing cushions, liquidity buffers and financial flexibility to absorb the blip in traffic.

As per Crisil Research's analysis of 300 companies, excluding those in the financial services, and oil and gas sectors indicated a 100-120 basis points (bps) dip on-year and 70-100 bps sequentially during the period under review. The trend marked the first on-year decline in 12 quarters. The analysis showed that as many as 27 of 40 sectors tracked by Crisil Research are likely to see their Ebitda margins shrinking.

However, the fall in rates is not significant in comparison with the reduction in duties for diesel. This correction is not significantly more than the fall in diesel price in the case of cement. The situation needs to be monitored for the next one-two months, the Crisil report said.

Coal and diesel are the major inputs used in the sector. After rising by an average Rs 10-15 per bag since August, a rise by another Rs 15-20 is likely over the next few months, ratings agency Crisil said. Besides, earnings before interest, tax, depreciation, and amortisation (EBITDA) of cement makers is expected to decline by Rs 100-150 per tonne in FY22.