ICRA

Accordingly, the armed conflict between Russia and Ukraine has led to a reduction in offtake of Russian crude and a consequent increase in crude oil and gas prices. The ratings agency noted that increasing oil prices add to the fiscal burden for the country, but it is a positive for upstream oil companies. "Additionally, domestic gas prices notified at $2.9 per mmBtu (GCV basis) for H2 FY2022 remain low".

A low inventory level of aluminium globally amid tight demand-supply situation in addition to any potential sanction on Russian aluminium exports are expected to aggravate the availability of the commodity in the rest of the world, and thereby keeping its prices at an elevated levels till normalcy is restored, rating agency ICRA said in a report.

As per the ratings agency, the trend has led many domestic OEMs to announce sizeable capital expenditure to augment the cell and module capacity, including the capex for integrated facilities under PLI scheme by the winning bidders. However, timely commissioning and ramp-up of ongoing capex in the module manufacturing value chain remains critical in the near to medium term.

According to ICRA Ratings, the long-term outlook for NBFC-MFIs remains robust, driven by the fact that the growth in disbursements is expected to have continued in Q3FY22, post revival in Q2FY22. "Disbursements picked up again in Q2 FY2022, pushing up the growth in the assets under management (AUM) of NBFC-MFIs to around 5 percent (annualized) in H1 FY2022," ICRA said.

The quarterly data suggested a modest broad-basing of the recovery in Q3 FY2022, relative to Q2 FY2022 when compared to respective pre-Covid volumes.

The Union Budget for FY23 will be tabled in the Parliament on February 1. The rating agency said that incentives and relevant policy measures are needed to promote investments in the energy storage segment, considering the increasing share of renewables in the electricity generation mix. "This apart, policy measures are required to revive the stranded gas-based projects, which would enable availability of balancing power sources," it said.

Small Finance Banks' main objective is to take basic banking activities to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries, among others. Like other commercial banks, these banks can also lend and take deposits. As per the rating agency's report, even as the growth in portfolio is expected to drive an improvement in revenue, the expected elevated credit costs are likely to keep the profitability subdued in FY22.

Operating margins of the sector are seen increasing by 300-400 basis points during the period. "Recent trends such as focus on digital brand building, improved offerings in bundled medical packages, changing consumer mindset towards organised players is likely to support demand traction for national diagnostic chains going forward," ICRA Assistant Vice President and Sector Head Mythri Macherla said.

The major inputs required in the production of cement are coal, petcoke and diesel. Elevated freight cost also added to the production cost. Notably, the projected decline in operational margins is despite a rise in production of the commodity and offtake by the infrastructure industry and rural housing sector.

On November 12, the central bank had said that classification of special mention accounts and non-performing accounts should be done on a day-end position basis and upgraded from an NPA to standard category only after clearance of all outstanding overdues.