Page 3 - Fitch Ratings

India's economic growth to boost demand of corporates: Fitch Ratings

Leading credit rating firm Fitch Ratings expects that India's resilient economic growth will boost demand of the corporates. In its latest research report on 'India Corporates: Sector Trends 2024', Fitch said that this is a sequel to the robust performance of the corporates in 2023 and will offset weakness from slowing growth in the key overseas markets. Rising demand and easing input cost pressure should boost margins of the corporates in the next financial year, Fitch said. Fitch said that with strong domestic demand growth, it is expected that India will be among the world's fastest-growing countries, with resilient GDP growth of 6.5 per cent during the fiscal 2024-25. This is despite a challenging global backdrop and the cumulative impact of the recent monetary tightening, it said. Sectors like cement, electricity and petroleum products are expected to witness a strong demand with high-frequency data in 2023 sustained well above pre-COVID pandemic levels. Fitch said that Indi

Better profitability to support corporate rating headroom: Fitch Ratings

Profit margins of domestic companies are likely to swell by 290 basis points over FY23 levels, boosted by lower raw material costs and rising volume led by local demand, despite faster capacity additions in some industries, which will lead to their rating upgrades next fiscal, says an international rating agency. In a report on the domestic corporates in particular and the economy in general, Fitch Ratings Friday said it seems the profit margins of the corporates it rates jumping by 290 bps above the FY23 levels. But it was quick to warn that a sharp or sustained rise in energy prices, given the ongoing geo-political risks, presents downside risks to the projection. On the economy, it expects the country to be among the world's fastest-growing large sovereigns, with resilient GDP growth of 6.5 per cent in FY25, marginally down from a likely 6.9 per cent GDP print this fiscal. The higher growth will be buoyed by strong demand for cement, electricity and petroleum products. This alon

Lok Sabha elections: Will Modi govt return to power in 2024? Fitch answers

Lok Sabha elections 2024: The agency said that the size of the majority in the next Indian Parliament could influence the ambitiousness of the administration's reform agenda

Fractious politics can slow reforms, derail policymaking: Fitch Ratings

Fractious politics can slow reforms and derail policymaking, and contentious elections can encourage the prioritisation of short-term growth, Fitch Ratings said on Monday as a large number of nations go to the polls. In its Global Sovereigns Outlook 2024, Fitch highlighted that a large number of elections are scheduled in 2024, including Bangladesh, Croatia, Dominican Republic, El Salvador, India, Indonesia, Korea, Mexico, Pakistan, Panama, Romania, South Africa, Sri Lanka, Taiwan and the US. UK elections must be before the end of January 2025. "Fractious politics can slow reforms and derail policymaking, and contentious elections can encourage the prioritisation of short-term growth objectives over longer-term structural initiatives," it said. Fitch said lower inflation might not help incumbents much, given prices remain well above pre-pandemic levels in most countries. The international environment is marred by two major conflicts entering 2024, neither of which appears to be on

India's FY24 power demand to rise 7% amid strong industrial activity: Fitch

Fitch stated that the receivable position of generation companies (gencos) will continue improving in the near term

Healthy outlook: Banks profit rises 33.5% to Rs 77,564 crore in Q2

High credit offtake; lower credit costs boost bottom line

Indian banks' Viability Ratings to benefit from improved performance: Fitch

Indian banks' Viability Ratings (VR) will continue to benefit from improved operating conditions and performance in the near term, said a global rating agency. "We expect Issuer Default Ratings (IDRs) to remain stable across banks as they are driven by our expectation of extraordinary support from the Indian sovereign (BBB-/Stable), should there be a need," Fitch Ratings said in a statement. Two Indian banks' VRs were upgraded in 2023, with upside possible for several banks as Fitch expects the recent, better-than-expected, financial performance, mainly in asset quality and earnings, to be maintained, it said. The recent revision of the operating environment score to 'bb+' from 'bb' also supports the assessment, it said. Five of the eight Indian banks' VRs are in the 'bb' category, reflecting a moderate degree of financial strength, while the other three with VRs in the 'b' category are still weighed down by their risk profiles, weak financial metrics of the past and weaker ...

Fitch upgrades India's mid-term GDP growth forecast to 6.2% from 5.5%

Fitch blamed China for pulling down the estimate of 10 emerging countries to 4 per cent from 4.3 per cent earlier

Fitch Ratings upgrades ratings on Tata Steel to 'BBB-' with stable outlook

Fitch Ratings on Monday said it has upgraded its ratings on domestic steel player Tata Steel Ltd (TSL) to 'BBB-' with a stable outlook. It has also upgraded the rating on USD 1 billion notes issued by Tata Steel subsidiary ABJA Investment, the rating agency said in a statement. "Fitch Ratings has upgraded India-based Tata Steel Limited's (TSL) Issuer Default Rating (IDR) to 'BBB-', from 'BB+'. The Outlook is Stable. We have also upgraded the rating on the USD 1 billion notes due July 2024 issued by TSL's subsidiary, ABJA Investment Co. Pte. Ltd., and guaranteed by TSL, to 'BBB-', from 'BB+'," it added. The upgrade follows a revision in the company's stand-alone credit profile (SCP) to 'bb+', from 'bb', on the reduction in uncertainty and financial risk from its UK operations. In the UK, TSL will replace its blast furnaces with more cost-efficient and environment-friendly electric arc furnace (EAF)-based steelmaking capacity. Consequently, we expect the UK operations' cost ...

Marginal credit boost: Fitch on India's inclusion in JP Morgan's bond index

Fitch estimated that inclusion in the GBI-EM indexes could facilitate approximately $24 billion in passive inflows into government bonds between June 2024 and March 2025

Reliance Industries may transform into holding company: CreditSights

Oil-to-telecom conglomerate Reliance Industries Ltd may eventually transform into a holding company, with majority stakes in independent entities that operate the major business verticals, CreditSights, part of the Fitch Group, said on Monday. In a report on billionaire Mukesh Ambani's succession plans at Reliance, it said robust credit profile, aided by strong anticipated earnings outlooks for its telecom and retail segments, mitigate a poorer outlook for Reliance's downstream oil unit amid high crude oil prices and its elevated capex needs. Reliance recently shed more light on the conglomerate's business succession plans, when company chairman Mukesh Ambani announced that his three children - Akash, Isha and Anant - would be inducted into the firm's board of directors. Ambani said he would continue performing his duties as chairman and CEO for five more years. "We view the further progress in Ambani's succession plans favorably, considering key man risk has been a persisting conce

Fitch retains India's growth forecast at 6.3%, flags inflation risks

Fitch Ratings on Thursday retained India's growth forecast for the current fiscal at 6.3 per cent saying the Indian economy continues to show resilience despite tighter monetary policy and weakness in exports, but upped year-end inflation projection on El Nino threat. The Indian economy grew 7.8 per cent in the April-June quarter of current fiscal on strong services sector activity and robust demand. "The Indian economy continues to show resilience despite tighter monetary policy and weakness in exports, with growth outpacing other countries in the region," Fitch said, while projecting 6.3 per cent growth for current fiscal, and 6.5 per cent for next fiscal. In its September update of the Global Economic Outlook Fitch, however, said that high-frequency indicators suggest that the pace of growth in the July-September quarter is likely to moderate. Growth in the July-September quarter is likely to moderate as exports continue to weaken, credit growth flatlines and the Reserve Bank of

What more can India do to win over the Big Three sovereign rating agencies?

A high sovereign credit rating can raise a country's star among the global investor community; a low rating, indicating doubts over ability to repay debts, increases its financing costs

Rating agency Fitch cuts China's 2023 GDP growth forecast by 80 bps

Beijing eases down payments, mortgage rates in fresh stimulus move

Fitch Ratings affirms 'BBB-' rating on ONGC with a outlook stable

Fitch Ratings has affirmed Oil and Natural Gas Corporation's (ONGC) rating at 'BBB-' with stable outlook. "ONGC's ratings are constrained by the ratings of the state of India (BBB-/Stable), its majority owner," Fitch said. "We maintain ONGC's Standalone Credit Profile (SCP) at 'bbb+', which reflects ONGC's scale as the largest oil and gas (O&G) producer in India, its significant reserves and production, and its vertically integrated and geographically diversified business model." The SCP also considers Fitch's expectations that ONGC's credit metrics will improve over the financial years ending March 2024 (FY24) to FY27. ONGC's credit strength, however, is counterbalanced by its long track record of declining domestic oil and gas production, which we expect to reverse over the next few years, though there is less certainty on its ability to sustain organic production growth through the cycle in the longer term. "We believe ONGC's status, ownership and control by the sovereign is ..

Fitch retains SBI, 5 other PSB' rating at BBB, with stable outlook

Fitch Ratings on Thursday affirmed the ratings of the nation's six public sector lenders, including State Bank of India (SBI) and Bank of Baroda (BoB), at BBB- with stable outlook. The other banks which the agency rated BBB- with stable outlook are Punjab National Bank, Canara Bank, Bank of India, and Union Bank of India. The rater has also affirmed these banks' viability rating at BB and its government support rating of BBB-. On retaining the long-term issuer default rating of SBI, the agency said the rating is support-driven, with the government support rating (GSR) above the viability rating (VR). SBI's GSR is the same as the sovereign rating of BBB- with stable outlook, reflecting the agency's view that SBI has the highest probability of extraordinary state support among the banks. The stable outlook mirrors that on the sovereign's own rating, it added. Revising the operating environment score of the bank to BB+ from BB, the agency said it reflects the view of structural ...

Fitch affirms SBI's long term rating at 'BBB' on asset quality, loans

Agency revises outlook for lender's asset quality score from 'stable' to 'positive'

Fitch warns rapid growth in unsecured retail credit needs management

Operating environment for Indian banks improved as economic risk recede

Sensex rebounds 507 pts from lows, ends 138 pts up; auto, IT stocks gain

Closing Bell on August 16, 2023: The shares of SBFC Finance, which debuted on Wednesday at a premium of 44 per cent, settled at Rs 92.2 per share, up nearly 62 per cent over issue price

JPMorgan, other top banks likely to face ratings cut, says Fitch Ratings

Stocks sink on downgrade warning