Page 5 - Crisil

IBC recoveries declining, resolution timelines getting prolonged: Crisil

Introduction of a focused bankruptcy law has helped improve the credit culture in India, but the last few years have seen a decline in recoveries and the resolution timelines getting prolonged, Crisil Ratings on Friday. In a note to observe the seven years of the Insolvency and Bankruptcy Code (IBC), the rating agency said the recovery rates have fallen to 32 per cent in September 2023, from 43 per cent in March 2019. At the same time, the average resolution time has increased from 324 days to 653 days, versus the stipulated 330 days, it said. The IBC has helped in resolving debt worth Rs 3.16 lakh crore stuck in 808 cases in the past seven years, the leading credit rating agency said. Its senior director Mohit Makhija said the IBC is "the most potent code" in India's corporate loan history, which has brought a "behavioural change" in borrowers. "The fear of losing companies has led to over Rs 9 lakh crore of filed debt being settled before the cases arrived at the IBC doorstep fo

NBFCs likely to see assets growth moderating to 16-18% in FY24: CRISIL

India's NBFC sector is expected to record a moderate growth of 16-18 per cent in the current fiscal because of relatively slower expansion on unsecured retail loans due to the recent regulatory measures issued by the RBI, CRISIL Ratings said on Wednesday. Assets Under Management (AUM) of Non-Banking Financial Companies (NBFCs) are set to log a healthy 14-17 per cent growth next fiscal on the back of continued strong credit demand across retail loan segments, it said in a release. "Growth may be moderately lower than 16-18 per cent expected in the current fiscal, as unsecured retail loans, the fastest growing segment in the NBFC AUM pie so far, are likely to see a relatively slower growth as NBFCs recalibrate their strategies due to the recent regulatory measures issued by the Reserve Bank of India," it said. Going forward, diversification in product offerings and funding profile will be key constituents of their growth strategy, it added. The rating agency further said retail credi

CRISIL upgrades outlook on Tata Power to 'positive' on profitability view

Tata Power on Wednesday said Crisil Ratings has upgraded its outlook on the company to 'positive' on expectation of an improvement in operating profitability this fiscal. The ratings agency had earlier assigned a 'stable' outlook on the company, Tata Power said in a regulatory filing. "CRISIL Ratings Limited has upgraded its outlook on the company (Tata Power) from AA/Stable Outlook to AA/Positive Outlook," it said. The revision in outlook reflects the possibility of better-than-expected business risk profile, if the improvement in operating profitability in fiscal 2024, across power generation and distribution business, sustains along with a continuing healthy financial performance with consolidated net leverage (ratio of net debt to EBIDTA) remaining within rating threshold, it said. The increase in operating profitability of Tata Power since fiscal 2023, is mainly on account of better profitability of its Mundra Ultra Mega Power Project (Mundra plant), improved efficiency in Odi

Coal plants capacity utilisation will improve to 65% this fiscal: CRISIL

Coal-based thermal power units' plant load factor (PLF) or capacity utilisation will improve to 65 per cent in the current fiscal year despite record renewable energy capacity addition, according to Crisil Ratings. "Healthy PLFs along with lower receivables and encouraging fuel supply will support the credit profiles of private coal-based generating companies (gencos)," Crisil Ratings said in a statement. The PLFs of coal-based power plants in India will improve to 65 per cent this fiscal despite record renewable energy (RE) capacity addition, it added. Over the past two fiscals, electricity demand witnessed a robust 8-9 per cent annual growth, driven by the post-pandemic economic rebound, the agency noted. During this period, 34 gigawatts (GW) of capacity has been added, with 90 per cent of it in RE, the statement said. In GW terms, this is a 9 per cent growth in power capacities, but on normative terms this was only 4-5 per cent growth as capacities operate at varying PLFs, and

CRISIL Ratings upgrades Jindal Stainless' rating to stable from positive

Stainless steel producer Jindal Stainless on Monday said Crisil Ratings has upgraded its rating to stable. Crisil Ratings upgraded the company's rating to stable from positive, the company said. "Long-term bank facilities and debt programme of Jindal Stainless Ltd (JSL) were revised from Crisil AA-/Positive to Crisil AA/Stable," the stainless steel producing company said in a filing to the BSE. As per Crisil, the ratings upgrade for Jindal Stainless acknowledges an improved business risk profile, forward integration through recent capacity expansions and acquisitions, and effective working capital management, Jindal Stainless Managing Director Abhyuday Jindal said. The enhanced rating for Jindal Stainless reflects the company's prudent capital allocation strategy for strong business management, Jindal Stainless Group CFO and Executive Director Anurag Mantri said.

Fertilisers & diamonds may be hit slightly due of Mideast crisis: Crisil

Domestic credit ratings agency Crisil on Tuesday said some sectors such as fertilisers and diamonds may be slightly impacted by the conflict in the Middle East. On a broader basis, the conflict has caused only a negligible disruption in India's trade so far, it said in a note. Some sectors such as fertilisers and diamonds both cut and polished may see a slight, but manageable, impact, while for most others impact will be insignificant, it said. However, it said that the conflict which started after the surprise October 7 attacks by Hamas against Israel has driven up prices of gold and crude oil which need to be watched. It said crude oil price movements are especially important for a country like India which depends on imports, and added that elevated crude oil prices have a cascading impact on a host of other sectors that consume the oil itself or linked raw materials. The agency said India's trade with Israel is relatively low, with the country accounting for only 1.9 per ce

HDFC Hybrid Debt Fund: Delivering returns with an enhanced credit profile

Shobhit Mehrotra and Srinivasan Ramamurthy have been managing this fund since September 2007 and December 2021, respectively

Data centres to see Rs 45,000 crore investments till FY26, says Crisil

The data centre industry is estimated to get investments of up to Rs 45,000 crore till the end of FY26, a domestic credit ratings agency said on Wednesday. The higher investments will be on account of demand for data and storage, Crisil Ratings said in a note. Large enterprises are increasingly embracing cloud solutions, which is fuelling the surge in demand for data centres, the agency said, adding that rising usage and adoption of Over-The-Top (OTT) platforms is driving up retail data consumption. It said mobile data traffic alone has risen at an annual rate of 45 per cent over the last five years. The newly launched 5G services will amplify data consumption among retail users even further, which will produce data that will finally be stored in data centres, the agency said. Moreover, there is an enhanced regulatory emphasis on local storage of personal data as stipulated under the Digital Personal Data Protection Act as well as through policies formulated by some of the sector

Chip supplies reallocating from computers, mobiles to automobiles: CRISIL

It added that the chip shortage is easing but the demand-supply dynamics are expected to be more balanced by 2025-26

India's copper industry has a new entrant, incumbents not worried

For 2022-23 (FY23), India's domestic copper production was estimated at half a million tonnes

Anil Agarwal's Vedanta appoints Ajay Goel as chief financial officer

Goel's last stint with Vedanta was as acting chief financial officer from October 2021 to April this year

Increased sugar prices to lift MSMEs' margins: CRISIL SME Tracker

Lower cane availability is expected to result in reduction in cane being diverted for ethanol production from 4.5 million tonne to 4 million tonne

Demand, supply mismatch pushing up vegetable inflation frequently: CRISIL

A study by rating agency Crisil found that vegetable inflation has been the most volatile in the food category, in fact.

India to spend Rs 143 trillion in infrastructure by 2030, says Crisil

Green investments will also see a five-fold rise from the past seven years to Rs 36.6 trillion

India Inc revenues to rise 8-10% in Q2, profit margins to expand: Crisil

India Inc is all set to report an 8-10 per cent jump in revenues for the September quarter while profit margins will also witness an expansion, an arm of rating agency Crisil said on Friday. This will be the first time in four quarters that the revenue growth will see an increase, it said. Automobiles, construction (which benefitted from truant monsoons) and information technology services sectors will be driving the revenue growth in the quarter, the rating agency said, adding that the year-on-year revenue growth in the preceding June quarter had stood at 7 per cent. The agency said its expectations are based on an analysis of 300 companies excluding ones in banking and oil sectors. "Growth in revenue was largely skewed towards consumer discretionary products and services, where automobiles and the retail sector led the pack, and construction-linked sectors, where companies accrued benefits from an early deployment of capital expenditure by the roads and railways ministries, Direc

India caught between Davids & Goliaths in global clean energy face-off

The US and Europe are offering 8 to 10 times more subsidies amounting to a massive $650 billion, around 18 per cent of India's gross domestic product

Bank credit growth to dip to 13-13.5% this year from 15.9% in FY23: CRISIL

Growth in wholesale credit, which makes up to 60% of overall credit, is likely to slow to 11-11.5% this year from a decadal high of 15% last year

Apparel retailers likely to register 7-8% revenue growth FY24: CRISIL

Organised sector brick and mortar apparel retailers are expected to register a 7-8 per cent revenue growth this fiscal, buoyed by festival and marriage season demand, and despite inflation impacting discretionary spending in the first quarter, according to a report. Continued store expansion, including into tier-II and III cities, will also help revenue growth this fiscal and over the medium term, Crisil Ratings said in a report on Wednesday. Despite moderation in topline growth, revenue growth will be comparable to the 8 per cent range seen before the pandemic, the report said. Last fiscal, retailers had seen a strong 38 per cent growth on a low base, driven by swift recovery from the pandemic-induced slump and higher realisations following a steep jump in raw material prices. Operating margins are seen at 8 per cent this fiscal as improving product mix in favour of the premium segment and lower input costs will offset the impact of higher marketing spends, the report said. The p

Led by festival season, revenue of apparel retailers to grow 7-8% in FY24

The revenue density, calculated as revenue per square feet, is, however, expected to remain below the pre-pandemic level: CRISIL

Paper industry revenue may dip 8-10% in FY24 despite volume gains: Crisil

Paper manufacturers' revenue may decline 8-10 per cent in the current fiscal despite gains in volume, as the average realisations are likely to soften on lower raw material prices and intense competition, rating agency Crisil said in a report. For FY24, the industry's total volume is expected to rise 5-7 per cent, similar to the last fiscal, and the operating margin will remain healthy at 18 to 19 per cent, ensuring a stable cash flow generation, it added. Moreover, modest capex spending undertaken -- mostly for debottlenecking and routine modernisation -- will help sustain credit risk profiles, as per the report. The Indian paper industry had reported revenue growth of 30 per cent a year before in FY23. "Indian paper manufacturers could see revenue decline of 8-10 per cent this fiscal, compared with a steep 30 per cent growth last fiscal, with average realisations expected to soften in keeping with lower raw material prices, and given intense competition," it said. The report is