Icra sees improving operating outlook for India
Inc
20/10/2014 12:57
One of the country’s leading rating agency, Icra, said in a report that India Inc. is likely to face a less challenging operating environment in the current fiscal against the backdrop of an improving macroeconomic scenario.
“The operating environment for the domestic corporate sector is likely to be less challenging during FY15 than it had been in the previous year, considering the emerging signs of stability in the macro-economic indicators and the likelihood of some improvement on the growth front," rating agency Icra said in a report.
Asia’s third biggest economy grew at the fastest clip in more than two years as Gross Domestic Product (GDP) expanded by 5.7 per cent in the April-June 2014 quarter, up from an annual expansion of 4.6 per cent in Q4 FY 2013-14.
Further, CAD improved to 1.7 per cent of GDP in Q1 FY 2014-15 from 4.9 per cent in FY 2013-14.
Consumer inflation, the most watched gauge of the RBI, fell for a second month on the trot in September 2014 to 6.46 per cent, the lowest since 2012, from a downwardly revised 7.73 per cent in August 2014. However, retail inflation remains above the RBI’s target zone, ruling out the prospect of a near-term interest rate cut.
However, with the Modi government stepping up its reform spree including FDI liberalisation, diesel price de-regulation, manufacturing impetus, financial and tax reforms, easing regulatory procedures and revival of stalled infrastructure projects will help many sectors.
“Moreover, several policy initiatives including efforts to revive stalled projects, tariff revision by state utilities, re-scheduling of premium payout for road projects alleviate some sector-specific concerns," the report said.
"While a significant turnaround is unlikely, some of the sectors which reported low credit ratio during the last few years - infrastructure, cement, capital goods, hotels, auto ancillaries - are likely to witness moderation both in the number and severity of rating downgrades," it said.
20/10/2014 12:57
One of the country’s leading rating agency, Icra, said in a report that India Inc. is likely to face a less challenging operating environment in the current fiscal against the backdrop of an improving macroeconomic scenario.
“The operating environment for the domestic corporate sector is likely to be less challenging during FY15 than it had been in the previous year, considering the emerging signs of stability in the macro-economic indicators and the likelihood of some improvement on the growth front," rating agency Icra said in a report.
Asia’s third biggest economy grew at the fastest clip in more than two years as Gross Domestic Product (GDP) expanded by 5.7 per cent in the April-June 2014 quarter, up from an annual expansion of 4.6 per cent in Q4 FY 2013-14.
Further, CAD improved to 1.7 per cent of GDP in Q1 FY 2014-15 from 4.9 per cent in FY 2013-14.
Consumer inflation, the most watched gauge of the RBI, fell for a second month on the trot in September 2014 to 6.46 per cent, the lowest since 2012, from a downwardly revised 7.73 per cent in August 2014. However, retail inflation remains above the RBI’s target zone, ruling out the prospect of a near-term interest rate cut.
However, with the Modi government stepping up its reform spree including FDI liberalisation, diesel price de-regulation, manufacturing impetus, financial and tax reforms, easing regulatory procedures and revival of stalled infrastructure projects will help many sectors.
“Moreover, several policy initiatives including efforts to revive stalled projects, tariff revision by state utilities, re-scheduling of premium payout for road projects alleviate some sector-specific concerns," the report said.
"While a significant turnaround is unlikely, some of the sectors which reported low credit ratio during the last few years - infrastructure, cement, capital goods, hotels, auto ancillaries - are likely to witness moderation both in the number and severity of rating downgrades," it said.
