Consolidating the gains over the previous quarters, Indian companies' credit quality improved across sectors in the first quarter of FY16, according to CARE Ratings.
The rating upgrades have outnumbered downgrades in FY14 and FY15, reflecting the improved credit quality prevailing in the system. The pace of improvement, however, declined in the quarter.
CARE Ratings in a statement said the modified credit ratio - the ratio of upgrades plus reaffirmations to downgrades plus reaffirmations - has been above 1 since the second quarter of FY14.
There has been notable improvement in the credit quality of companies in sectors such as computer hardware & electronic products, banks, sugar, telecom, and transportation.
However, stress was evident in sectors such as hospitality, cement and construction. The number of downgrades was more than upgrades in these sectors, the rating agency added.
The rating upgrades have outnumbered downgrades in FY14 and FY15, reflecting the improved credit quality prevailing in the system. The pace of improvement, however, declined in the quarter.
CARE Ratings in a statement said the modified credit ratio - the ratio of upgrades plus reaffirmations to downgrades plus reaffirmations - has been above 1 since the second quarter of FY14.
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Modified credit ratio for April-June 2015 came in at 1.04, lower than 1.10 in the previous quarter. It was also significantly lower than 1.25 in the second quarter and 1.23 in the third quarter of FY15.
There has been notable improvement in the credit quality of companies in sectors such as computer hardware & electronic products, banks, sugar, telecom, and transportation.
However, stress was evident in sectors such as hospitality, cement and construction. The number of downgrades was more than upgrades in these sectors, the rating agency added.