Moody's sees rated India Inc firms' credit profile improving through 2019

Moody's Investors Service on Thursday said the credit profiles of rated corporates in India will continue to improve through 2019, despite external headwinds. 

It said sectors, particularly steel, mining and auto, will benefit from strong GDP growth, which will in turn support domestic demand, Moody's VP and Senior Credit Officer Kaustubh Chaubal said.

In a statement, Moody's said revenue will grow for most Indian industries, despite external risks. 

"As for the rupee's depreciation against the US dollar, such a situation will have limited negative credit implications for rated Indian corporates because most rated India-based corporates have protections in place -- including natural hedges, some US dollar revenues and financial hedges," Moody's Assistant VP and Analyst Saranga Ranasinghe.

 

On the telecom sector, Moody's said the capital spending levels and leverage will stay high due to intense competition.

Downstream oil refiners, too, will see elevated levels of capital spending as they look to increase refining capacity in line with demand growth.

With the steel and auto suppliers sectors, Moody's said that industry consolidation for companies in these sectors will continue through 2019. While this would lead to improved business profiles, any debt-funded acquisitions may lead to elevated leverage levels, it added.