Fitch Ratings

Fitch Ratings expects India's corporate capex to grow by 10-12% annually over FY23 to FY24, owing to the country's supply-side policy steps, domestic corporates focusing on localisation, and multinationals looking to reduce risk in global supply chains. Structural demand visibility, supply-side measures, and healthier corporate.

Fitch also said a sustained improvement in the financial performance of Indian banks bodes well for the sector's intrinsic risk profiles. The capital buffers are broadly in line with its projections, Fitch said. The sector's impaired-loan ratio declined to 4.5 per cent in the first nine months of the financial year ending March 2023 (9MFY23), from 6 per cent at FY22 which is nearly 60 basis points (bp) of its FY23 estimate, Fitch said.

Falling reserves reflect large, albeit declining, current account deficits (CADs), external debt servicing, and earlier FX intervention by the central bank, particularly in 4Q22, when an informal exchange-rate cap appears to have been in place, the statement mentioned, the report said.

In a statement issued the credit rating agency said: "Fitch Ratings believes that Indian banks' exposure to the Adani group is insufficient in itself to present substantial risk to the banks' standalone credit profiles. Indian banks' Issuer Default Ratings (IDRs) all remain driven by expectations that the banks would receive extraordinary sovereign support, if needed."

According to Zook, the Budget was largely in line with Fitch Ratings expectations and did not significantly change the sovereign credit profile. India's fiscal deficit and government debt ratio are high relative to peer medians, but the government's emphasis on reducing the deficit helps to stabilise the debt ratio over the medium term, Zook remarked.

TCS reported 19 per cent year-on-year (yoy) revenue growth in 3QFY23 and 50bp quarter-on-quarter (qoq) expansion in the EBITDA margin, reflecting continued growth and the company's ability to pass on higher costs to customers, Fitch said.

According to the credit rating agency Fitch, the demand for power in India grew at 11.3 per cent year-on-year (YoY) during the first half of FY23 due to post pandemic rebound and a low base during 1HFY22.Fitch Ratings expects India's power demand to grow by around eight in FY23 (FY22: 8.2 per cent).