Indian firms have become more credit-worthy in the current fiscal on better profitability and funding access, rating agency Crisil said today.
"The pressure on Indian companies' credit quality has eased a little in the current financial year, after reaching its peak in the second half of 2008-09," the agency said.
The improvement is due to better access to funds at reasonable rates and an increase in profitability over the past two quarters, it said, adding that though pressure on credit quality continues, its intensity has abated.
"Companies have benefited from the accommodative stance of monetary policy, an increased appetite for risk in international capital markets, and improved sentiment in the Indian equity market," Crisil Ratings Senior Director Raman Uberoi said.
The agency said companies' interest burden has reduced. Interest expenses of 403 non-financial companies in the S&P CNX 500 index dropped by 5 per cent in the March 2009 quarter, and by another 12 per cent in the June quarter, over their preceding quarters, it said.
The burden has reduced, Crisil said, because interest rates have eased, working capital needs have gone down with commodity prices, borrowings in the global market (which are cheaper than rupee-denominated loans) in June were highest since last September, and relief due to stretched balance sheets on improvement in equity market valuations.
